The only time in American history that the federal government completely paid off its debt was in 1835. Because the feds have carried a debt for more than 99 percent of our history, one might therefore wonder whether the national debt is really such a big deal. Unfortunately, when it comes to debt, especially sovereign debt, size matters. The Gross Federal Debt broke the trillion-dollar mark for the first time in fiscal 1982. (Table 7.1, tables found here.) So it took 147 years for the gross debt to hit $1T and only 30 years more to hit $16T. The gross debt is now larger than the economy, as measured by the gross domestic product. Invoking the 2011 debt ceiling deal, Democrats assert that they've already cut the deficit by a trillion dollars. And according to Table 1.1, the overall deficit for 2013 is estimated at -$901B, an improvement of $325B. But the "fiscal cliff" negotiations are all about rejiggering the deal struck in 2011. That is, the feds want to redo the across-the-board...(Read Full Post)