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A Toast is in Order...America's Debt Level Just Hit $33 Trillion
A toast is in order...to America's profligate spending. It really is quite something to behold.
Obviously, as I typically am with these "milestone" posts, I'm being facetious.
We've unfortunately just hit our latest milestone, $33 trillion in debt.
It seems like just yesterday...well, it was actually February 2, 2022...when I posted how the U.S. government had just hit $30 trillion in debt. Less than two years to rack up $3 trillion in debt. That's quite an accomplishment.
If only it was something to be proud of.
It's not.
In fact, we're slowly starting to see the ill effects of carrying so much debt.
While interest rates are at high levels due to the Federal Reserve Bank raising them to try and bring inflation back to manageable levels, the rates are now beginning to creep even higher as a result of America's unsustainable debt amounts. Yes, that's one of the negative effects of an economy carrying so much debt.
Don't like the financing rates for mortgages, automobile loans and credit cards these days? Too bad, the Fed plans to keep rates at this level for a while, and now we have to contend with the market pushing them even higher thanks to America's debt.
How high will rates go? There's no way to know.
And spare me the "I remember when interest rates were double digits. These rates are nothing compared to them."
That's true, back in the 1970s and '80s interest rates were in the teens. But you didn't have extraordinarily high pricing on housing, cars, etc., which makes financing at current rates difficult to impossible for many.
And, we didn't have government debt levels so great that each time a new issuance is made, more and more of the U.S.'s budget is taken up by interest being paid on that debt. A quick example. Current amount spent on U.S. defense: 794,356,600,000. Current amount spent on debt interest: 704,600,550,000. The amount spent on interest is getting closer and closer to the amount we spend on defense, which is the third largest federal budget item behind Social Security and Medicare/Medicaid.
And our elected officials just don't seem to care one bit.
Enjoy the party while it lasts.