U.S. National Debt a Struggle for Everyone
The national debt is the total amount of money Washington has borrowed from others to keep spending alive. The federal government initiates programs that it cannot fund from the available revenues. Consequently, the government borrows money from the public, other governments, and international financial institutions (for example, the International Monetary Fund (IMF) and World Bank).
The national debt as of October 2022 is $31 trillion. And if current spending continues, it will multiply quickly. With the exception of a few years, the Washington budget has been in deficit for most of the last century. The following chart explains the deficit of the country over the years.
The national debt is paid like a mortgage, by borrowing funds from someone and either repaying the debt or paying interest on the borrowing. We are not repaying debt. So, the amount of borrowing goes up; therefore, our interest payments are immense and now a significant component of our annual federal spending.
Gross Domestic Product (GDP) is the total of all goods and services sold in the US. The debt-to-GDP ratio projects the country’s ability to repay the debt. If you think about this, a debt to GDP of 100% (which was the situation in 2013) means that the county can repay the national debt in one year’s worth of GDP.
Much like in your household, having a debt-to-income ratio of 100% means that all your debt could be paid in one year…. but how would you live if you did that? In 2022, the US debt to GDP moved to 124%, which is alarming and likely to move even higher.
The national debt has severe repercussions throughout our economy and dire impacts on our daily lives. The most severe impact of our national debt is that it will be impossible for the U.S. to have a surplus or balanced budget soon. Experts predict that U.S. national debt will increase to $46 trillion by 2032 (or debt to GDP will be 575%).
Even more troubling is that interest costs will increase as well. We are currently paying interest payments of $718 billion (11% of federal spending). The higher the interest payment, the less money is available for federal spending, i.e., forcing the feds to cut programs to pay the interest.
What programs will they cut? How will those cuts affect us?
The growth of the national debt (and increased interest costs) will restrict our country’s ability to invest in future research, innovation, education, and social welfare projects. The combination of the higher national debt, higher interest payments, and slower economic growth will change the way federal spending is distributed. This will impact us in several ways: reductions of programs to help us innovate or educate or protect vulnerable people, our response to natural calamities, tackling pandemics, and the like.
The most crucial impact of national is debt bondage. Every citizen of the United States is under a debt obligation of $93,000 per person currently, and growing.
Ralph Waldo Emerson said, “A man in debt is so far a slave.” Emerson is correct because a person in debt has no free will and is always under the influence of their lender. The national debt turned the people into bonded slaves, where the people had to work to pay the higher taxes imposed by Washington. With a stagnant economy and rising debt obligations, governments resort to increasing taxes and expanding the tax net to ones having low incomes.
The national debt has indebted every one of us along with generations to come! And, if not addressed, it will grow into a monster curtailing our freedom and liberty -- negatively affecting our living standards.
The U.S. citizens look to Congress, but Congress has failed to adopt tangible and long-term measures to put the country on the path of economic growth. It has failed to create opportunities while safeguarding prosperity for its people. It also needs to establish a sound fiscal foundation that could ensure favorable conditions for growth, including increased access to capital and more resources for public and private investments.
Congress has the power to limit the federal government from borrowing and accumulating more debt through a ‘debt ceiling.’ Yet Congress seems helpless against the federal government as it has increased the ceiling several times, forced by the White House. Congress has also been accused of using the debt ceiling for its political interests rather than for the long-term economic welfare of the American people.
There is hope.
There are options for the people of the United States to counter the oppressive economic policies of the federal government. The People have the power to limit the federal government and bring the power (from bureaucrats and politicians in Washington) to the people of the states. Michigan is striving to bring back the power to its people by using Article V of the US constitution. We are calling for a Convention of States. It is time to stop Washington from amassing more debt.
Do you believe in smaller government and fiscal responsibility? Join the Convention of State movement. Start by signing the PETITION.
Then VOLUNTEER. Washington bureaucrats won’t fix this, but together we can. We are building a strong grassroots network here in Michigan and could use your help!
