With Halloween in our sights, here are two terrifying facts about America’s debt: the U.S. government spends $7 million every minute, and if Bill Gates gave his entire fortune to Washington, he would only be able to keep the Capitol Hill doors open for another 20 days.
There are usually two issues that always garner bipartisan support: debt and war. With the Republicans and Democrats coming to an agreement on Capitol Hill to further indebt future generations, the U.S. national debt topped $20 trillion for the time in the country’s history on Friday. Is President Donald Trump modifying his campaign slogan to Make America’s Debt Bigger Again?
U.S. Debt Surpasses $20 Trillion
According to the U.S. Treasury Department’s daily statement, the federal government’s gross debt surpassed $20 trillion on Friday. After Congress voted to suspend the debt ceiling for three months, and permit the Treasury to borrow on the open market, the debt spiked from $19.8 trillion to $20.1 trillion.
That’s right. Because President Trump persuaded the Democrats to help him get a spend-and-debt-limit deal done, the U.S. debt jumped $317,645,000,000 in just a single day. The government will now be fully funded through December 8 – the next debt ceiling increase is set to occur as early as March 2018.
Despite both sides of the aisle patting themselves on the back, the debt burden will offer long-term impacts to the nation’s finances. In fact, according to several conservative projections, Washington will spend $6 trillion on interest alone over the next 10 years.
Michael A. Peterson, president, and CEO of the fiscally conservative Peter G. Peterson Foundation was right when he said on Monday:
Surpassing $20 trillion in debt is the latest indicator of our nation’s dire fiscal condition.
So, in effect, we have decided to spend more on our past than on our future.
These are ominous words, indeed.
Will Candidate Donald Trump Please Stand Up?
Candidate Trump railed against previous administrations and both parties for saddling the country with astronomical levels of debt. Midway through the Republican primaries, the real estate billionaire mogul promised to eliminate the national debt in eight years. Like other presidential contenders who win the White House, he tergiversated, and now it isn’t as much of a big deal.
Candidate Trump sounded so much better than President Trump. What the heck happened?
It’s the same old song and dance routine: one party decries the opposition for neglecting to rein in the debt – and vice versa. Republican candidates will pay lip service to conservative voters on the campaign trail and discuss fiscal responsibility. Democratic candidates will tell progressive voters on the campaign trail that all what is needed to remedy the debt is to spend even more.
With these impertinent jackanapes in government, no wonder why the U.S. is in a pecuniary mess.
For years, many private think tanks and public agencies have warned about the coming fiscal crisis. In addition to former Congressman Ron Paul (R-TX) and former presidential candidate Ross Perot, former Comptroller General David M. Walker has been one of the few to tour the U.S., sounding the debt alarm. Walker noted in 2015 that the U.S. debt is really closer to $65 trillion when you factor in all of America’s unfunded liabilities:
If you end up adding to that $18.5 trillion the unfunded civilian and military pensions and retiree healthcare, the additional underfunding for Social Security, the additional underfunding for Medicare, various commitments and contingencies that the federal government has, the real number is about $65 trillion rather than $18 trillion, and it’s growing automatically absent reforms.
The Ticking Debt Bomb
Today, the fastest growing expense in the federal budget is interest. With the Federal Reserve gradually raising interest rates – the central bank will pull the trigger on multiple rate hikes to combat inflation in the coming years – interest will eventually become the biggest expenditure in Congress. Before you know it, when interest payments become so severe, Washington will only be able to afford just a handful of programs: the war machine, Social Security and servicing the debt.
In May, the budget deficit rose $88.4 billion. The budget deficit is expected to jump to $602.5 billion this fiscal year – yes, former Vice President Dick Cheney, deficits do matter. Where is Trump’s axe? That is the question.
The debt clock is ticking, and when it runs out, it won’t necessarily be President Trump’s fault, no matter how much the media will blame the 45th president. The can has been kicked down the road for decades by both parties. President Trump had the opportunity to really drain the swamp and take control of the nation’s finances, but that won’t be happening – he even conceded that the Fed could just print the money to pay back creditors.
(In a way, Trump is correct since the U.S. government will only have two options one day: declare bankruptcy or devalue the U.S. dollar by half.)
America’s economic day of reckoning is upon us, but don’t only blame Trump for the nation’s debt addiction. Instead, you can fault the Obamas and Bushes, the Bernankes and Greenspans of America for putting the budget on a credit card in the names of your grandchildren.
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