Our national debt is simply out of control.
No other words do the situation justice.
The country borrowed $488 billion in the first quarter of 2018, which broke the previous quarterly record of $483 billion set in the first quarter of 2010.
Of course, back in 2010 that money was going towards propping up the entire economic system.
What are we spending money on today? There is no crisis. No alarms. Not even a recession.
In fact, gross domestic product (GDP) rose by 2.3 percent in the first quarter this year.
It seems the tax cuts, two-year budget deal with higher spending caps, and $1.3 trillion spending bill are the main contributors to a bleak picture that’s worsening.
From October 2017 through March 2018, the deficit rose to $600 billion, with spending growth outpacing revenue growth threefold.
A scarier concern is the Congressional Budget Office’s (CBO) estimates that call for much higher spending over the next decade, with debt approaching 100 percent of GDP.
I think the CBO could even be understating the situation.
The estimates factor in no inflation. Plus, the temporary tax cuts will be allowed to expire after 2025, though I bet they get extended for political reasons.
All in all, we’re out of control.
As of December 2017, the debt to GDP ratio was 329 percent. In Europe, it’s 446 percent.
They say trouble arises when the ratio exceeds 90 percent.
Here’s how a person gets to a 329 percent debt-to-income ratio:
At what point does it become a drag? And what will happen when interest rates rise? We’re all in this boat, I hope it stays afloat.