Since the start of the fiscal year in October 2023 the federal government has spent $855 billion more than it received in revenue – the deficit.
The current national debt is near $35 trillion. As of April 2024 it costs $624 billion to maintain the debt, which is 16% of the total federal spending in fiscal year 2024.
Politicians have plans to deal with this. The political right want to extend the 2017 tax cuts and trim spending – in some magical way that doesn’t gore anyones Ox.
The political left wants to raise taxes on the wealthy, but not to reduce the deficit or debt, but to spend on new programs with ongoing liabilities.
The voting public wants one thing from government – MORE as long as it’s paid for by someone else – or not paid for at all.
A common point of view says don’t raise taxes, cut spending to lower the debt. That sounds fine except when you get into details.
Look at it this way, if the government spent zero, it would take about three years of no spending to lower the debt by half.
The US spends about $70 billion on all foreign aid, roughly 1% of the budget. Some people naively say cut that spending, but it is a drop in the bucket.
We need to address the problem gradually, not add to the deficit, increase revenue to pay down debt.
Does it all matter?
Imagine you owe a ton of money on your credit card. A high national debt is kind of like that, but for a whole country. Here’s how it can hurt:
- Bigger Bills: Just like your credit card interest, the government spends more and more just paying off the debt,leaving less for things we all need like fixing roads or helping students.
- Burdening the Future Crew: This debt is kinda like passing the credit card bill to your kids. They’ll have less money to spend on their priorities because of what we borrowed today.
- Less Money to Grow: When the government is deep in debt, it’s like they’re competing with businesses for loans.This can make it harder for businesses to get the money they need to create jobs and grow the economy.
- Losing Trust: If the debt gets too high, people might start to worry the government can’t handle its finances. This can make borrowing even more expensive.
- Shaky Times: A high debt makes the country more vulnerable to economic downturns. If something bad happens and the government needs more money, it can be harder to deal with because of all the debt they’re already juggling.
Remember, experts argue about how much debt is “safe” for a country. But even if it’s not an immediate crisis, a high national debt can definitely cause some headaches down the road.
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If you can get away with stealing from other people or future generations in the present and not worry about future consequences, why not steal even more and more? That seems to be the prevailing thinking with quite a few members of Congress.
And so far they have not only gotten away with it, but they are even admired for their “foresight and Progressive thinking”! The US preeminence is withering before our very eyes. And the public news is dominated by celebrities wallowing in their wealth and frivolities. O well… it was good while it lasted!
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Al Lindquist raises a very good point as to how to look at the debt. We do need to address the annual deficits that keep growing the debt.
There are as many thoughts as to how to do that as there are congress types running around. They, naturally , are guided by lobbyists. Joe Blows opinion is worth nada.
We all know that spending has to be corralled and some tax increases need to be added. The pipe dream of lowering interest rates so that the lower debt interest cost will solve the problem has to go.
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You might actually reduce the deficit if we could grow are way out of the mess we have made This happened in the Clinton years where the peace dividend (cold war thawed out in’89) and the tech boom with capital gains brought in the dollars. Taxes were also raised but Clinton in a Houston speech late in his administration said he regretted that legislation.
When we look at budget and tax proposals we should ask ourselves if this will grow the economy? When we compare the nation’s debt to credit card debt we know one way to deal with CC debt is to earn more money and pay it off–as individuals we can grow our way out of our debt. We can become more productive as a nation.
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If, but highly unlikely. We don’t even have the population we need in the future.
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Debt as a % of GDP might be a more meaningful figure.
If my mother knew what my mortgage payment was, say 30 years ago, she might have been appalled. But more meaningful was my my mortgage payment as a % of my income and/or assets.
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That is 122.28% at present, among, but not the highest in the world. Japan and Italy are higher
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Debt as a % of GDP –OVER TIME– might be more meaningful data.
WTH happened in 1980?
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Yes, our population could and should be larger but technology and productivity can do wonders for an economy–you have large populations in many countries throughout the world– India is a good example, but it’s more than that generates growth. Rule of law is vital in a healthy society. So many intangibles that create a solid society.
Unless we live within our means we will pay a price somewhere down the road. As long as we the people want benefits we don’t want to pay for it’s a matter of time.
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