Looking At the Numbers
The folks at FreedomWorks
created a lovely illustration of the USA's financial situation:
Perhaps I should've gone with "terrifying" instead of "lovely." But it does a wonderful job of showing where we are and how we got here. The president names mark the end of their terms in office.
Theoretically this chart could keep getting expanded forever--20 trillion, 30 trillion, 40 trillion--but there is a catch. Somebody has to keep loaning us the money to pay for the additional spending. Plus they need to keep loaning it as we roll over all the 3 month, 12 month, etc. bonds. We don't have a thirty-year mortgage on the federal government. So the moment the Treasury Department runs out of willing lenders for the next trillion of debt the interest rates go up--and they go up on *all* the debt as it gets rolled over. Next stop, hyperinflation and economic collapse.
Or we could get out act together, cut spending to match revenues, and start paying off that pile. There's an argument for keeping some debt as a reference "safe bond" in the financial markets--but I think one or two trillion of that should be sufficient. Current Mood: worried