Don’t Think America’s Debt is a Big Deal? Think Again.
I’ve written about America’s debt and deficit problem in various forums for years now.
The reaction is always the same. Disinterest, and that’s if the articles even attract any attention at all.
I shouldn’t be surprised, it’s the same response the vast majority of our elected officials give to the topic, and it’s – supposedly – their job to be aware of and address the matter.
So, I doubt this piece will get much in the way of views, either.
Should a few readers take a peek, I’ll keep the post brief, hitting the main points of why America’s astronomical debt and growing deficit do matter to the country and its citizens.
The U.S. Budget
Interestingly, while the majority of my government budget posts get little attention, one graphic does make a fairly regular appearance in Savings Beagle’s Google Analytics traffic record.
That graphic is the Congressional Budget Office’s Budget Infographic. So, at least some people are interested in how the U.S. government is funded, and on what our tax dollars are spent.
That graphic was in a post titled “Saving is More Important Now Than Ever,” and was for the 2015 federal budget.
Let’s take a look at the most current version, the Federal Budget in 2017.
As you can see, federal revenues were $3.3 trillion and the federal government spent $4.0 trillion.
Meaning, the U.S. government spent approximately $700 billion more than it brought in for 2017.
And that amount is closer to $1 trillion now and is anticipated to stay in that stratospheric range for the foreseeable future.
So, now that we have a handle on what the U.S. deficit is running, let’s take a look at the accumulated debt.
U.S. Debt
The current U.S. debt stands at $21.9 trillion…and climbing by the hour.
You can view that latest tally at U.S. Debt Clock, along with a vast array of budget and government-related numbers and stats.
The primary issue many Americans have when it comes to considering the debt and deficit problem – and I might argue a good number of our elected officials hold this challenge, as well – is that the numbers are so large that they really have no meaning.
What does $21 trillion even mean? Is it that bad? Or is it like the average family
Unfortunately, the $21 trillion in debt is not the same as carrying a manageable balance on your credit card. It’s significantly worse.
Our elected leaders have allowed the U.S. debt and annual deficits to get out of control in the past decade or so and we’re quickly reaching a point where the sky-high amounts are really going to matter.
If you’ve read any of my recent stock market quarterly updates, you know the normalization of interest rates by the Federal Reserve has some nasty side effects.
One of which is that interest paid to those investing in U.S. Treasurys will increase to levels that will soon become a very serious burden to the federal budget.
Looking back at the CBO Budget Infographic, you’ll see the current annual interest payments on U.S. debt are $263 billion.
The CBO estimates interest payments will rise to $915 billion by 2028 as a result of more normalized interest rates and much greater accumulated debt on which interest payment must be made.
So what, you might say?
Well, in the upcoming years, the increased interest payments will surpass the amounts the U.S. spends annually on:
- Medicaid (health coverage for low-income Americans) – 2020
- Defense – 2023
- And on all non-defense discretionary programs combined – 2025
According to the U.S. Treasury Department, net interest on the public debt is one of the key drivers behind increased spending in fiscal year 2018.
And, according to The Wall Street Journal, “In the next five
Which means more and more of the federal budget will get crowded out just so interest can be paid on the U.S.’s enormous outstanding debt.
With higher debt levels and more of the federal budget going to pay interest on that debt, it’s very likely U.S. economic growth will be negatively effected in the years to come.
Which means less jobs, stagnant wages and the inability to adequately address economic downturns that will surely arise.
And we haven’t even touched on the problems associated with the underfunding of Social Security and the unsustainability of both the Medicare and Medicaid programs due to an aging population and out-of-control health care costs.
All the while, many U.S. elected officials – both Democrat and Republican – turn a blind eye.
What to Do?
If after reading this, you feel the U.S. debt and deficit problem needs addressed, here’s what you can do.
Contact your elected officials in Washington, D.C. and tell them your concerns. Call, write, or email, and tell them reducing the deficit and debt are important to you and you want to know their plan for making that happen.
And then sign up with the Fix the Debt organization.
Fix the Debt is a nonpartisan organization that is educating Americans – both the public and policymakers – about the rising national debt and how it will affect the country.
You can learn more about the debt problem, as well as lend your support to Fix the Debt’s efforts to make changes that will put America on a more sound fiscal path.
There are some in this country who take this matter seriously. We need even more.
The key is organizing and ensuring the wishes for a fiscally responsible government and a prosperous America are known to those who can actually do something about the financial crisis that is all too close…our elected officials at the federal level.
What will you do?
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