• Tag Archives deficit
  • 18 Facts on the US National Debt That Are Almost Too Hard to Believe

    At around $22.5 trillion, the United States national debt sits at 106 percent of Gross Domestic Product (GDP). There is no disputing that this gigantic debt will someday become due and payable. However, there is hesitation among the political class as to what must be done to pay down and eliminate this debt.

    Progressive lawmakers have largely refrained from discussing this liability, preferring to claim that the United States can continue to fund exorbitant government programs. Conservatives have unsuccessfully, on numerous occasions, attempted to limit federal outlays. With each failed attempt, conservatives instead continue to vote for spending increases. At the National Review, Michael Tanner writes,

    there is no effort to prioritize or make the difficult choices of governing, there is only…more.

    Each attempt to cut or reduce the growth of federal spending has been met with resistance and ferocious outrage.

    If there is any takeaway from these unsuccessful attempts to reduce spending, it is that federal spending has subsidized numerous projects or programs, which have grown dependent on the federal government. There may be many good uses of federal funds, but this does not provide lawmakers with a “Get-out-of-jail-free card.” For now, lawmakers continue to spend as if they are children in a candy store with no limit on their parents’ credit card. At some point, lawmakers must address the underlying problem: federal spending.

    Lawmakers are representatives for their constituents. This goes without saying, but lawmakers are unlikely to address the ever-increasing national debt until voters demand action. What remains unfathomable to many voters is how much money $22.5 trillion truly is. As Jon Miltimore has written, “the problem is that the human mind has trouble understanding a figure so huge.” Below are some facts that help put into perspective just how large is the sum of $22.5 trillion:

    1. In order to pay down our national debt you would have to combine the GDP of China, Japan, and India.
    2. The United States owes $68,400 per citizen.
    3. The United States owes $183,000 per taxpayer.
    4. The United States currently has $125 trillion (yes, trillion) in unfunded liabilities.
    5. According to the nonpartisan Congressional Budget Office (CBO), the US debt held by the public will reach 100 percent of GDP in 2028.
    6. In 2008, interest on the federal debt was $253 billion. Interest for Fiscal Year (FY) 2019 is roughly 89 percent higher.
    7. For FY 2019, interest alone on the federal debt is $479 billion. In 1979, total federal government receipts were $463 billion.
    8. In the year 2000, the federal debt was $5.67 trillion. In 2019, federal debt is 297 percent higher.
    9. At Forbes, Jim Powell writes that the old New Deal cost about $50 billion from 1933 to 1940, whereas the “future cost of old New Deal programs still in effect is reckoned at more than $50 trillion.”
    10. A recent analysis by the CBO projected that the federal budget deficit (deficit as in the difference between federal outlays and revenues) will grow to $1 trillion alone in 2020.
    11. As of December 2018, only ten countries have worse Debt-to-GDP ratios than the United States.
    12. At NPR, Danielle Kurtzleben writes that Senator Bernie Sanders’ “taxation-and-spending plans…would together add $18 trillion to the national debt over a decade.”
    13. According to the Center on Budget and Policy Priorities, roughly 24 percent of federal spending goes to Social Security, 26 percent to federal health insurance programs, 9 percent to safety net programs, and only 2 percent on transportation infrastructure.
    14. By 2025, the cost of servicing our national debt will exceed the cost of our military spending.
    15. The cost of implementing a Universal Basic Income, presidential candidate Andrew Yang’s central social program proposal, would cost $3.8 trillion per year or roughly 85 percent of current federal spending.
    16. It would take the United States 713,470 years to pay down the national debt if we paid $1 per second of the year.
    17. Modern presidents have doubled the national debt every nine years.
    18. The Federal Reserve “purchased large amounts of federal debt as part of its quantitative easing program,” thus cheapening the cost (decreasing the interest rates) of money.

    Lawmakers and political pundits continue to insist that federal revenues are the real issue despite continuous growth in federal revenues. Heated rhetoric over federal tax cuts ignores the reality that federal spending increases continue to outpace federal revenue increases.

    At some point, purchasers of US treasury securities may request a higher return, materializing in higher interest rates, unless lawmakers address our growing national debt. For now, it is up to voters to demand that lawmakers implement responsible policies that protect our nation’s financial security.

    Mitchell Nemeth

    Mitchell Nemeth holds a Master in the Study of Law from the University of Georgia School of Law. His work has been featured at The Arch Conservative, Merion West, and The Red & Black. Mitchell founded the Young Americans for Liberty chapter at the University of Georgia.

    This article was originally published on FEE.org. Read the original article.

  • The Price of Trading Future Obligations for Today’s Benefits

    I’ve been listening to Mark Spitznagel’s The Dao of Capital, which is three parts philosophy, two parts history, and one part investing advice, so if you’re into that sort of thing and don’t mind the same concept hammered home in a dozen different examples across multiple categories, you will love this book. In the chapter about the concept of “time preference,” he uses a striking turn of phrase when talking about the reality of our future selves and distant descendants.

    The symptoms of this affliction [referring to our culture’s extreme focus on the now, at the expense of the future] can be found in the chronically low savings rate in our culture, ranging from financial to even fresh water, soil, and of course forests. And analogously and most incredibly, governmental fiscal deficits that deviously and increasingly rob future generations, our helpless intergenerational forward selves.

    The first time I ran into this concept of a human being as a continuous being, simultaneously real across the span of his lifetime, was when reading about Kurt Vonnegut’s Tralfamadorians in Slaughterhouse-Five. They perceive time as existing all at once. In the book this produced a kind of passive, fatalistic philosophy. Since all that will be already is, there was no room for the idea of free will.

    I don’t take that view, but the image from the book, of viewing time and the people in it the way you might look at a stretch of the Rocky Mountains, their past and future selves just as real as the present one, stopped me in my tracks. It puts the present, which always dominates our perceptions and emotions, into a new perspective. It echoes something Einstein used to say about looking at past and future as equally and simultaneously real with the present.

    This is in a section where Spitznagel credits Austrian economist Eugen von Böhm-Bawerk with noticing this truth and applying it to economics, and his choice of the word “helpless” really leaped out at me. It is a word that for me instantly conjures images of the downtrodden people who it is our moral duty to help.

    Suddenly the ideas of saving, investing wisely, delaying gratification, sacrificing in the now for something better later, becomes more than just a strategy for self-gratification for the far-sighted. It is a moral duty to a future self and to future others, people every bit as real as you are right now, but whose condition is completely at your mercy.

    This idea is not so foreign to those who speak a language like Japanese or Chinese, where the verbs make no distinction between past, present and future. But for those of us raised on English, focusing more on the canoe than the river when thinking about time, this might be a jarring insight!

    Anyone wishing to change the world through politics has a duty to understand economics. As arcane as some try to make it, economics is really just the study of naturally occurring tradeoffs. It is a pair of binoculars we can use to survey the landscape of humanity’s struggle against the material world to grow and thrive. The better we can see, the better we can navigate in that realm. Those who don’t will often do what seems right, but actually leads to destruction.

    Böhm-Bawerk was right about the importance of time. Would-be reformers like some of the Democratic 2020 hopefuls would do well to pay attention to it. The systems we create today need to avoid creating crises later. Human affairs are unpredictable, but not hopelessly so. Through economics we actually can spot errors, learn from them, and plan to avoid them.

    We today are the children of generations that traded future obligations for present benefits: borrowing to make finance payments, instituting a monetary system that slowly bleeds the value out of cash savings in order to boost the present buying power of the state, the list goes on. We live in a time of incomprehensible abundance and yet the young feel as if they have to build their lives on very thin margins.

    Part of this, according to Robert Kiyosaki, is a failure to pass down financial wisdom, but there has also been a failure to respect the sanctity of our future selves and our distant descendants, all of whom are every bit as real as you are right now, even if they are not yet visible.

    We cannot reach back to the past to ask for the guilty to restore what they took, but we can decide what to do with the world that we now have. According to Albert and Eugen, the future already exists. The people in it depend on us in the here and now to act in their interest.

    No one else can.

    This article is republished with permission from Rabid Quill. 

    Benjamin J. Thompson

    Benjamin Thompson is a software developer living in South Bend, Indiana. He ran a grassroots Ron Paul 2008 group and is currently the Indiana coordinator for the Libertarian Party Mises Caucus. You can also find posts by him at the AustroLibertarian.com blog.

    This article was originally published on FEE.org. Read the original article.

  • The National Debt is the Most Serious Crisis America Faces

    A generation ago, the national debt stood at just a smidgen over USD $4 trillion and a young presidential candidate named Bill Clinton was discussing a great plan he had to have it entirely paid off by now. Oops. The national debt is now 5.5 times bigger.

    More than anything, this astoundingly bad public policy is the fault of Barack Obama, undoubtedly the most irresponsible president in our history…who added on more to the national debt than all other presidents combined in an orgy of Washington, DC, debauchery that saw the size of the federal government mushroom while hundreds of thousands of new bureaucrats were added to federal payrolls, and Washington, DC, housing prices skyrocketed as federal government employees and private industry sub-contractors paid for by the government reveled in their six-figure paychecks and outrageously lavish healthcare and pension plans… all paid for by us, the taxpayers.

    Obama’s stewardship of our national finances was truly obscene, but George W. Bush was nearly as bad. He has even less of an excuse, in fact, because he had a Republican Congress to work with for most of his eight years. During that time, Bush took us from USD $5.8 trillion to USD $10 trillion, something that seemed reckless at the time. Of course, in light of the Obama USD $10 trillion spending extravaganza, Bush looks prudent by comparison.

    people with law and medical degrees and MBAs from Ivy League universities, people that come from the finest law practices and accounting firms and consultancies and banks and financial institutions in the country…and our end result is the debt avalanche we now have before us?

    Why do we believe politicians of either party when they tell us that they will make our national debt a top priority?

    Why is it that the American people seem to fail to understand how ruinous our national debt truly is and what an astounding percent of our national budget we are now spending on servicing that debt?

    Former Pennsylvania Governor Ed Rendell has penned an op-ed which presents some eye-opening statistics as to just how bad our national debt really is. By next year, the cost of servicing the national debt (paying interest on it), will exceed the cost of Medicare. By 2025, it will exceed the cost of our military spending, making it the most expensive item in our entire national budget!


    Today’s high school and college students are well-versed in a whole host of social justice topics, courtesy of their Marxist professors. How much would you venture to bet that they hear little to nothing about the national debt and what it means for American workers and families?

    Today’s campus culture social justice themes include the “right” to “free” healthcare and education… transgender bathrooms… the need for “safe spaces”… the enforcement of campus “speech codes” designed to make sure that no one ever gets their feelings hurt… a robust and comprehensive policy on identifying and denouncing inappropriate Halloween costumes… and a stale and tired Marxist discourse on the exploitative nature of American capitalism.

    But… when was the last time college students ever got together to protest a USD $22 trillion and rising national debt? Do they understand the threat, even?

    And even more importantly… do they understand why and how we have gotten here?

    Quite simply… we have arrived at this point by spending infinitely more than we collect in tax revenue, mainly on things that have no mention in the Constitution as being a function of the federal government.

    Public sector unions, and the millions of workers and hundreds of millions of dollars that they spend every year to support the Democratic Party, play a fundamental role in not only our ruinous levels of federal debt but the debt crisis facing our state and local governments as well.

    Nothing is more ruinous to our future than the ever-increasing demands of government employees… specifically public sector union employees such as those at AFSCME and the SEIU. They live like kings and queens on the backs of actual working class people… all the while donating hundreds of millions of dollars to the Democratic Party to ensure that their six- and seven-figure paychecks never run dry.

    They couldn’t care less about government budgets or the national debt or actual working-class people. They couldn’t care less about “public service.” There are only two things that public sector unions care about: soaking the rest of us for the biggest paychecks possible… and shoveling money to socialist politicians like Bernie Sanders and Elizabeth Warren.

    But it is not merely their salaries and the fact that government employees rarely, if ever, get fired. It’s the highly lucrative nature of their healthcare and pension plans… plans to which they contribute far less than their private sector counterparts.

    For states, these plans have proved a bitter pill to swallow, and have led to the greatest fiscal crisis in the United States that you have most likely never heard about: unfunded pension liabilities. When you drill down into the details, it is almost impossible to believe that the situation is true. Essentially, states promise outrageously generous pensions to state employees (who, of course, rally to support whichever candidate promises them the most money), and then fail to fund those very plans… kicking the can down the road to future administrations and generations.

    Now, it amounts to a USD $6 trillion crisis.

    For the libertarian and conservative movements, it’s time to stand for fiscal responsibility and common sense. It’s time to stand against government employees and their demands, and explain to the American people that the government is spending their money on entirely unconstitutional (read: illegal) things. It’s time to take a strong stand against the public sector unions like AFSCME and the SEIU that are leading this country to fiscal ruin.

    And more than anything, it’s time to force Trump to actually live up to his promise of draining the swamp: reigning in the excess and beginning to drastically reduce the size of our bureaucratic state: firing large numbers of government employees.

    These government employees are driven by self-interest.

    It is hard to envision government employees stepping back from the situation and saying:

    Well, I have a pretty generous salary, healthcare, and pension. It’s far more generous than the private sector enjoys. And we are $22 trillion in debt, and the government is spending too much money. So… as much as it pains me to say… me and some other government employees should lose our jobs. The government is spending too much money, deficits and debt are growing, and I should go look for a job in the private sector.

    That is never going to happen. Public sector unions are a millstone around our neck, and as many commentators have noted, they have no natural enemies.

    Except, of course, for citizen watchdog groups and independent media outlets who are not afraid to denounce them and point out their ruinous nature.

    I, for one, will not rest until we return our government to the vision of the Founding Fathers, who would not have approved of any of this. Let’s start by ending the Department of Education, the Department of Housing and Urban Development, the Department of Energy, and the Department of Agriculture. That would be a good start. We could use the money we saved to begin paying off our national debt, and government employees would have to do something that the vast majority of real working class people have to do every day: compete in a highly competitive free market economy to earn our daily bread.

    This article is reprinted with permission from Panam Post. 

    David Unsworth

    David Unsworth is a Boston native. He received degrees in History and Polit