March 18, 2019
The appalling national debt is a common theme here, and there’s new cause for celebration because it hit a new milestone recently – $22 trillion!
To get there, the debt is jumping at more than $30 billion per month. Plus, the Congressional Budget Office says budget deficits will top $1 trillion per year, every year, beginning in 2020.
All this puts us further down a path of financial instability…and nobody cares.
Regardless of which party is in control, federal spending increases every year. The enormity of our national debt or annual budget deficits is of little concern to politicians.
And every day Americans don’t care either. In fact, most people are wholly unaware.
But at some point, higher interest rates (driven by debt) will capture everyone’s attention. From mortgages to bonds to loans, people will feel it sooner or later.
What’s driving the debt?
- Our aging population
- Rising healthcare costs
- Growing national debt interest
- Insufficient tax revenue
Perhaps it all means our government is too big and spends too much money.
Maybe one day politicians will face their worst fears – that the debt will have to be solved through spending cuts and tax increases. Until then, they take the easier option of spending.
Lastly, our debt-to-gross domestic product (GDP) ratio is currently more than 100 percent. That means the value of our debt is greater than the value of what we produce economically.
Going back to 1800, when the debt-to-GDP ratio of an advanced economy eclipses 90 percent, typically a slowdown of 1.2 percent occurs.
Clearly, the weight of this debt is heavy. We’ll incur it until we do something. The first step is caring enough to act.