Iconic MAD Magazine kid mascot, Alfred E. Neuman, posited: “What, me worry?’
Well, maybe, Alfred, yes!
Here in our picturesque, quaint, late-summer state, do we really need another worry? We’re already thinking about presidential elections, immigration, gun control, F-35s, milk prices and whether all of the firewood is split and stacked.
There is a concern out there that seems too daunting to actually comprehend. But it is something we need to worry about: The national debt remains one of America’s most persistent problems.
According to Catalyst columnist and blogger Luka Ladan, the American people certainly see addressing it as a dire need.
“According to the Peter G. Peterson Foundation, more than 80 % of Americans believe that elected officials should spend more time addressing America’s debt crisis. Nearly 60 % claim we are moving in the wrong direction on fiscal issues,” Ladan wrote in June.
Ladan writes that, while the reasons behind the rapidly increasing national debt are not necessarily common knowledge, Americans generally understand that the U.S. economy is saddled with debt.
But the facts are quite startling:
First, this year, the federal government’s total debt surpassed $22.5 trillion — the highest in U.S. history. In per capita terms, that comes out to $68,368 in public debt per person. (That number grows at an alarming rate. See for yourself at https://www.usdebtclock.org).
Our national debt now exceeds gross domestic product — that is, total U.S. economic output. National debt stands at 110% of GDP, which is the highest debt-to-GDP ratio since World War II (118%).
The new debt level reflects a rise of more than $2 trillion from the day President Trump took office in 2017. Annual deficits and the national debt rose to new heights under the Obama administration, and the trend has continued under President Trump.
The pressing question for all Americans (especially as we are about to shift into a higher gear in the election cycle) is: Why should we care?
National debt is the total amount of money that a country’s government has borrowed, by various means. The federal government adds to the debt by spending more than it receives in tax revenue. In other words, each year’s budget deficit is added to the national debt, while a budget surplus is subtracted. Unfortunately, it’s been a long time since the federal government sat on a surplus. (The last time was in 2001, when the government ended the fiscal year with a budget surplus of $127 billion — down from $237 billion a year earlier, but still in the black.)
These days we are seeing red. (Financially, and in exasperation that the number has gotten so massive. Just to be crystal clear, written out, the debt is $22,500,000,000,000.)
According to Treasury Department, the U.S. budget deficit recently widened to $866.8 billion — a 27% increase since last year. This means that government expenditures far exceed tax receipts. In fact, government receipts totaled $2.86 trillion from October 2018 through July 2019, while outlays came out to $3.73 trillion.
And what are we spending all of this money on? Much of today’s budget deficit can be traced to increased spending on health care and the military. Medicare outlays, for example, recently rose by 11% to $66 billion.
It affects every one of us, and there are no signs of slowing.
The U.S. government is expected to add $12 trillion to the national debt over the next decade, bringing the debt-per-capita level to well over $70,000 per person — and beyond. As America ages and health care spending inevitably rises, the national debt is sure to follow, placing an even heavier burden on existing tax collection.
“By 2029, debt is estimated to reach $28.7 trillion,” the Congressional Budget Office predicted in January.
It does not appear deficits are being offset by gains in economic growth. And recent calls on Congress to rein in irresponsible and unnecessary spending seem to be falling on deaf ears.
Even Alfred E. Neuman knows the situation is no laughing matter.
At this point we can cut spending, raise taxes, figure out a way to drive economic growth at a faster rate than the debt, or get Congress to shift spending to areas that create the most jobs. (Research shows that spending on bridges, roads, and public buildings creates the most jobs per buck.)
The debt may be too big to comprehend. But that may be exactly what crushes us.