It is easy to get carried away with political viewpoints on the debt situation of the United States. It is helpful, however, to start with a simple tabulation of the facts and the data. Here is a quick summary of the debt situation, focused primarily on how we got here.

Ever Increasing Debt

Deficit spending has been a habit of the US government since the very beginning, but the scale of the deficit in peace-time eras has been greatest in the last fifty years. 

When the government spends more than it actually receives, the government issues US Treasury securities to cover the difference.

These securities are purchased by non-governmental agencies, such as foreign countries, individuals, investment vehicles, and corporations. This debt is called the "Debt Held By The Public," wherein the term "public" does not refer solely to American citizens.

Debt is also purchased by other governmental agencies, the largest of which is the Social Security Trust Fund.

The total outstanding debt, which is the combination of both Debt Held By The Public and Intragovernmental Debt, has never gone down since 1957.

In 1957, the total outstanding debt of the US declined from $272.8 billion in 1956 to $270.5 billion. Some debt was also modestly paid down in 1947, 1951, 1955, and 1956.

With the exception of those years, the total outstanding debt for the US has continually increased each and every year since WWII.

(Note: Although there was technically a surplus during three of the eight Clinton years -- in 1998 through 2000 -- which then continued into the first year of President Bush -- 2001 -- the total outstanding debt never went down during those years. While the surplus was used to reduce the total Debt Held By The Public, the Intragovernmental Debt rose during those years by a greater amount than the federal surplus and the reduction in Debt Held By The Public.)

All Time Record Deficit Spending

During the past fifty years, the deficit spending levels have been much, much lower than they are at present.

From 1947 through 2008, average deficit spending was just -1.6% of GDP.

From 1980 through 2008, average deficit spending was only slightly higher, at -2.5% of GDP.

The highest years of deficit spending, prior to 2009, were 1983 through 1986, with the deficit spending at: -5.9%, -4.7%, -5.0%, and -5.0%, respectively.

In 2009, however, the total size of the deficit spending increased dramatically, as shown in the following chart, which illustrates the federal deficit as a percentage of GDP.

The deficit level in 2009 was -10.0% percent of GDP.

This is an all-time record high for the deficit since WWII.

The projected deficit for 2011, from the White House FY2012 Budget, is -10.9%, which will become the all-time record high for the deficit.

The Problem Is Increased Spending and Lower Revenue 

The explanation for the record high deficit is relatively simple.

As can be seen in the following chart, federal receipts dropped sharply at the exact same time that federal spending increased sharply.

The dramatic divergence between receipts and spending is clearly visible. It is this tremendous new gap between receipts and spending that is the real problem with US debt.

The gray bands in the above charts (and those below) indicate recessionary periods, as defined by the NBER.

These periods of slower and sometimes lower GDP growth amplified the problem of divergent receipts and spending. This is clearly seen when the numbers are viewed as percentages of GDP.

Record Low Receipts and Record High Spending Make For a Record High Deficit

When viewed as a percentage of GDP, the divergence of receipts and GDP is just as dramatic.

What this chart does not show, however, is that both receipts and spending reached all-time post-war record levels.

Federal receipts dropped to an all-time record low of 14.4% in 2009, which had not been as low since the 1950 level of 13.4%, the only year since WWII when receipts were lower than they are now.

Federal spending, by contrast, rose to an all-time record high of 24.9% in 2009.

The following table illustrates these numbers for historical receipts and spending.

Source: CBO

These are remarkable numbers.

The result of this divergence between receipts and spending has been an explosive growth in the total outstanding debt of the United States.

Growth of Total Debt

The following charts shows the total growth of the US debt since 2000, both in real terms and as a percentage of GDP.

At the end of fiscal year 2000, the total outstanding debt of the United States was $5.67 trillion.

As of August 3, 2011, the total outstanding debt of the United States is $14.57 trillion.

This is an increase of 157% in just eleven years.

Conclusions

What the above data show is that the real crisis regarding US debt is not the debt ceiling.

The real problem is the tremendous divergence between receipts and spending.

The increased spending, it could be argued, has occurred because the US government has tried to stimulate the economy through increased spending and through continued low tax rates.

It could also be argued that the increased spending has not noticeably increased the overall GDP growth of the US, while the continued level of low tax receipts has been a result of the slower economy. After all, income tax rates are unchanged from the years of 2006 forward (with the exception of falling estate tax rates, which are minimal contributors to total receipts). The lower total receipts are a result of citizens making less taxable income.

Many of these arguments, however, quickly dissolve into emotional political viewpoints and bitter, vitriolic ideological attacks between the two major parties of the United States.

Regardless of the arguments made, however, it is clear that the only real and meaningful solution to the US debt crisis is the following: close the gap between receipts and spending.

It is not likely that closing this gap is even possible unless both the low receipt and high spending sides of the problem are addressed.

Whatever the approach, somehow the US government must find a way to close the gap between receipts and spending that has so explosively developed in the past three years.

The market's recent declines on the passage of the raised debt ceiling legislation appears to be in part a vote of low confidence that the politicians currently in office will actually find such a solution. They may not even be fully recognizing the problem.

We are unaware of any other media outlet, other than Briefing.com, that has reported the fact that, as percentages of GDP, receipts are at a sixty-year record low and spending is at a sixty-year all-time high, resulting in the record high deficit levels.

Until these simple facts reach the forefront of discussions about the debt situation, it seems the discussion is likely to remain mired in embittered, but passionate, name-calling and ideological battles. That type of discussion led us to the disappointing resolution to raise the debt ceiling, as it continued to push the real issues into the future, instead of the present.

Comments may be emailed to the author, Robert V. Green, at aheadofthecurve@briefing.com

For more discussion on the US debt issue, please see this week's Big Picture column. For even more detailed analysis, please refer to the recent report published by Briefing Research, Briefing.com's institutional research service.