In the next month as the election nears we’ll continue to hear a great deal about the U.S. debt now over $16 trillion and climbing. While the nation faces many issues nothing is more serious to our long term stability as a sovereign nation than the massive debt we’ve accumulated over the past decade.
You may have heard some of these analogies before but getting a true understanding of the sheer size and scope of this debt will, I hope, cause us each to recognize why this issue must be addressed and why we absolutely must begin reversing the spending habits of this nation. If you spent one million dollars a day since the day Jesus was born, 2,012 years ago you would not have spent one trillion dollars but, instead, only about $750 billion dollars. If that’s not personal enough for you, consider this, based on the current U.S. population, every U.S. citizen —man, woman and child — now owes just under $50,000 each to pay for the debt we’ve racked up over the past few years.
In 2011 the World Bank estimated that the Gross World Product, that is the value of the products world-wide would be valued at approximately $80.7 trillion dollars. In the United States the Gross National Product is valued at approximately $15.2 trillion dollars. Our debt now exceeds the total one year production of the entire country. The U.S. government is the world’s biggest client, spending more money — our money — than any other entity in the world. The U.S. government spends one million dollars every eight second and currently borrows approximately 40 perceny of the money it spends.
In the last year alone our debt rose by $1.2 trillion. In comparison the world’s tenth largest economy is our neighbor to the north, Canada. Their economy is $1.7 trillion. Our neighbor to the south, Mexico, the fourteenth largest economy, is just slightly smaller then our 2011 debt. In fact our debt has now grown so large that there isn’t enough cash in the world to cover the debt so the federal government has become the major purchaser of the debt financing it by printing more than $1.6 trillion.
I don’t know about you but those numbers should be scaring the day lights out of us all. But perhaps we’ve all just become so accustomed to borrowing money that as long as the country can continue to borrow we assume that there must not be a problem. Oh sure we hear about the debt and the reduction in the credit rating but does it really hit home or as they say is ignorance bliss. As citizens of this country we are all co-signers and ultimately guarantors of this debt that’s been accumulating by Republicans and Democrats alike — we all own a piece of this.
Like any household the more money you owe the more expensive it becomes to borrow money. At some point regardless of how much interest you are willing to pay, lenders won’t put more of their money at risk knowing you are so far in the hole they’ll never see their money again. When you are spending 40 percent more money than you bring home, how long do you think it will take before someone comes knocking on the door?
The biggest difference between personal finance and the U.S. government is the government’s ability to print more cash. As long as our lenders, the other countries around the world, continue to turn a blind eye to this practice we can get away with it, but just as the government looks unfavorably on counterfeiters, so do the other nations of the world. Like any large debtor once it becomes apparent we have no intent or ability to change our spending ways, and pay off this debt our dollar will be rendered as having no value and other assets will be claimed in place of the cash to cover the debt.
The candidates will both talk about their plans to reduce spending and tackle the debt. Until the American public is willing to step up and demand that debt reduction is priority number one, our national leaders will value election and reelection, more than being the disciplined leaders who tell us the hard, cold facts we would rather not hear nor deal with. Think about your newborn child or grandchild who perhaps was just born owing $50,000, upon birth because we lacked the resolve to address this growing debt.
Democrats want to increase taxes to the rich. Republicans want to see the economy improved so more people can help carry the tax load. We must be willing to face the truth. It will take every man, woman and child to step up and accept their share of this debt. Rich, middle income or poor, we must all accept responsibility. There can be no more passing the buck, the blame or failure to accept these facts. If we fail to recognize this crisis, the interest on the debt alone, estimated at over $400 billion annually, will outpace our efforts to reduce the principle debt.
So as you watch and listen to the upcoming debates and the candidates talk about their plans to be fiscally responsible by cutting costs and reducing the debt with plans in the billions spread out over many years so as to sound good today but placing the true impact long after they have left office, be mindful. I hope you can put your arms around the magnitude of our debt and how those plans may pale in comparison to the true crisis we face and the tremendous burden we are placing on future generations.
Dan Alexander is publisher and CEO of Denton Publications. He may be reached at firstname.lastname@example.org.