National Debt: The U.S.’s Next Big Problemby Tim Manni
After assuming its first debt in 1790, the national debt of the United States has risen to unfathomable amounts — and it growing larger by the second. Expanding by over $1 trillion per year (however this year’s deficit is already estimated to be about $1.85 trillion), our national debt is just over $11.5 trillion dollars, the “equivalent to over $37,000 for each and every American.”
In recent years our national debt skyrocketed with the onset of the conflicts in Iraq and Afghanistan and President Bush’s stimulus package. The debt has continued to soar under President Obama and the massive bailouts of the financial and auto industries, his own stimulus package, and so on:
The overall debt is now slightly over 80 percent of the annual output of the entire U.S. economy, as measured by the gross domestic product.
By historical standards, it’s not proportionately as high as during World War II, when it briefly rose to 120 percent of GDP. But it’s still a huge liability.
The nation’s debt is growing so onerous that the interest we pay on our loans alone is the country’s fourth largest spending category:
Interest payments on the debt alone cost $452 billion last year – the largest federal spending category after Medicare-Medicaid, Social Security and defense. It’s quickly crowding out all other government spending. And the Treasury is finding it harder to find new lenders.
How will the debt impact consumers? Associated Press writer Tom Raum says it’s highly likely that the soaring debt will cause taxes to rise and the government to pull back on Federal benefits and services.
To get a handle on what our national debt looks like and how fast the dollars disappear, be sure to watch a national debt clock. The national debt clock near Times Square had to be updated in 2008 when the debt ran so high the clock ran out of numbers:
If things can’t be turned around, including establishing a more efficient health care system, “We are on an utterly unsustainable fiscal course,” said the White House budget director, Peter Orszag.