Imagine your family spent more this year than you earned. Uncomfortable, but manageable. Now imagine your family had spent more than it earned every single year since 2001. By now you would be destitute.
That is what the federal government has been doing. For the past 25 years — ever since Bill Clinton left the White House — Washington has spent more than it has taken in. Every single year. The national debt now stands at $39 trillion. In 2001, the United States owed less than $6 trillion. Today we owe nearly $39 trillion. The federal debt has grown by $33 trillion in just 25 years. Here is the worrying part. In the entire 212 years from George Washington's first inauguration through Bill Clinton's last day in office — through the Civil War, the Great Depression, two World Wars, and the Cold War — the United States accumulated $5.8 trillion in debt. In the 25 years since, we have added $33 trillion more. More than four-fifths of the total debt the country carries today has been borrowed in the past quarter-century. Our brains are not wired to grasp numbers this large. So consider it another way. A million seconds ago was about 11 days ago — late April. A billion seconds ago was 32 years ago, in 1994, when the World Wide Web was just getting started. A trillion seconds ago was about 32,000 years ago. Woolly mammoths still roamed Europe. Farming had not yet been invented. No one, so far as we know, had yet reached North America.
That is what a trillion looks like. And the United States owes almost forty of them.
The pace is accelerating. Of that $39 trillion, $2.7 trillion was added in the past year alone. Ten trillion —
more than 27 percent of every dollar America has ever borrowed — has been piled on in just the past
five years. The federal government now adds roughly $8 billion in new debt every single day.
Great nations are rarely destroyed by external enemies. They are more often destroyed by debt. The
historian Niall Ferguson has warned that when the cost of servicing old debts crowds out the essential
investments that sustain national strength — especially defense — decline becomes almost inevitable.
History is littered with cautionary tales. Habsburg Spain. Bourbon France. The Ottoman Empire. Each
was once the greatest power on earth. Each was overstretched by debt.
Ferguson identifies a critical threshold — what some now call the Ferguson limit — beyond which a
great power cannot long survive: the moment a nation spends more on debt interest than on defense.
At that point, fiscal arithmetic begins to dismantle geopolitical power. The United States is now flirting
with that threshold.
A few months ago I was at the Ole Miss game in Oxford when a B-2 stealth bomber flew over the
stadium. The crowd went wild. It was one of the most thrilling sights I have ever seen — a symbol of
American strength, the kind of demonstration of raw power that not only keeps the United States
secure but keeps adversaries across the globe in line. Each B-2 cost over $2 billion to build. Keeping one
in the air costs about $150,000 an hour. There are only 21 of them.
The risk is that one day the United States — like Habsburg Spain — will simply not be able to afford the
things that make us strong. And it isn't just defense. Medicaid. Social Security. Federal pensions. Every
one of them depends on the United States being able to roll its debt at manageable rates.
Cutting spending alone will not be enough. We also need growth — and an AI-driven productivity boom
looks increasingly likely to deliver it. Spending restraint and growth, working together, could narrow the
deficit over a decade. Eventually, the debt itself could begin to be paid down.
This — not the midterms, not the next round of congressional redistricting — is what really matters. It
will decide whether our children's children live better lives than we do, or whether we follow Europe
down the path of higher taxes, rising costs, and demographic decay.
Douglas Carswell is President & CEO of the Mississippi Center for Public Policy. Mr. Carswell is the author of this post.
This post was sponsored by the Mississippi Center for Public Policy.
20 comments:
we are a generation away from some SERIOUS economic problems
This article begins with an analogy to how a family does finances. And that's the problem. Washington DC does not operate like a family. They think it's just one big money trough, and the debt they leave is someone else's problem. To effectively deal with debt, you first must do something about what causes it and what is adding to it. That's politicians. No matter how much income the government takes in, politicians will always spend every penny of it and always borrow more, just so they can spend more. And as we have seen so many times, when they hit their borrowing limit they just change the limits.
Well, its going to be difficult to make America great again with the explosive growth in debt over the last couple of years.
No, they’re destroyed by mass immigration of people who don’t assimilate and who are only here to suck up resources.
The dollar will be debased. Period. 10-20% inflation over the next 10 years, but they will tell you it is much less.
This article shows that both parties are equally responsible. The old saying, we have met the enemy and that is us. We the voters are responsible for electing people by their party affiliation or tell us what we want to hear. In order to even begin to address the problems this country faces we must elect representatives willing to make the difficult decisions that must be made. That means cutting programs we may like, while also making changes to the tax code to raise revenue.
The conflict with Iran shows that for all the multibillion dollar weapons that we have, an enemy with drones and small boats can not be defeated. But our representatives are beholden to the defense contractors and will likely approve the $1.5 trillion dollars the Pentagon is asking for. The leader of China basically told the world we are a declining power during the President’s recent visit.
Unfortunately I don’t have much hope for a change and the country my grandchildren will live in will be much different than what those of us in our 60’s have known.
Government finances should not be compared to household finances. A household can't print their own currency (if it could, it probably would). A household is not in control of the world's reserve currency. Extreme debt levels are problematic and this should be a priority going forward but using this analogy is incorrect and not helpful. The uncomfortable truth is the government needs inflation to help push down Debt to GDP levels at this point. GDP growth will only be part of the solution.
I keep hearing about what Clinton did. You need to look at how much the country had to borrow when Clinton was president. If he balanced the budget why did we borrow money during his time as president?
To use a family analogy correctly, you’d have to imagine a family spending everything it has, maxing out ten credit cards, then going and getting 50 more credit cards and maxing them out, then getting credit cards to put the interest charges on, then getting 100 more and repeating that upward climb in debt with no intent to paying everything off.
I feel like we need to do more trickle down. Just pick more people that can't do anything about it to get the trickle!
a lot of you like this out there, but wrong.
12:40 - There's little incentive to stop spending when you can create the dollars you spend
The economic growth from the Trumpster and J.D. and Mario, etc.
will allow both re-payments and diminishing % of GDP. But if the public screws the pouch by electing even 1 Demodumb group, all bets are off. Our choice!
All the elites have to do is keep the plebs pacified until they can build enough hyper scale compute power, nuclear power generation plants, and robotics factories to replace 90% of humanity. They won’t need the little slips of worthless paper to motivate the plebs to work any longer. They won’t need large scale agriculture to feed the robots. All they will need are enough automated organic farms, and small-scale bespoke manufacturing for their clothes, and they can live in luxury. Globally population 100 million. In perfect harmony with nature. None of this will matter anymore.
Hey Dougie,
Of that 33 trillion since 2001, $8.7 trillion (26%) has happened under your cult leader trump. And for full disclosure $4.7 trillion under Biden. We need to reduce spending and raise taxes but nobody wants to do that.
You only have to listen to these politicians to realize none of them understand economics.
History, real history, is full of instances where countries have solved their economic shortfalls by resorting to the most basic means available to man or animal: TAKE IT FROM SOMEBODY ELSE. Appropriate it, steal it, convert it, rob them, whatever it takes, but cover your debt with the other guys' money or resources. It's happening every day as it always has. If we must take the oil, the minerals, the food, the land, whatever we can no long pay for, we just take it. That's why we invest in a military in the first place. If they can't hold it, they can't keep it. If they can't collect, we don't owe them a damn thing. Fortunately we have a president who understands and is in the taking business. He understands how the world really works. Do you?
Seriously that’s what the ancient Roman’s did. They lowered the gold and silver in their coins and added more nickel. Caused serious inflation. Ancient debased of mine by the worlds most powerful empire
It’s not the politicians fault. We the voters voted for this. We have no one to blame but ourselves
It’s not just Clinton all past presidents did this
Post a Comment