The National Debt (Part I)

While Americans preoccupy themselves with President Obama’s foreign policy and the Democrats’ healthcare mandate, the nation’s financial affairs steadily slip into what promises to be the deep, dark abyss of runaway inflation. Although such concerns are not without merit, as Americans we must prioritize our political concerns if we as a nation are to survive.

As of today the U.S. national debt is $12,799,639,983.01, increasing at an average of 4.11 billion dollars per day. To put this in perspective, the national debt is greater than the total economies of China, the United Kingdom and Australia combined. Furthermore, according to the Congressional Budget Office, this debt is expected to grow 9 trillion dollars over the next decade, bringing us upwards of 20 trillion dollars. However, the sheer magnitude of the debt is not the real problem. Rather, it is our inability to pay it back.

In 2008 the U.S. taxpayer spent 253 billion dollars on interest alone –that’s six times what we spend on the Department of Education, or thirteen times more than NASA. The Congressional Budget Office expects payment on the interest of the debt to rise to $900 billion a year by 2019 – that’s more than all the money we spend on national defense combined. In other words, the national debt is forcing the American people to divert greater and greater resources to servicing the debt rather than funding public services or, better yet, financing the innovations necessary to increase our standard of living. In this way, the national debt is truly a bipartisan issue, as failure to address the debt guarantees a complete inability to finance government projects of any kind, regardless of their breadth or purpose.

For many, this may seem impossible. After all, the United States is a financial giant. How could it be that a nation as great as ours can be brought to its knees by lack of financial prowess? Unfortunately, such belief no longer accords with reality. America is not the financial powerhouse she once was. She neither produces nor trades, but rather lives off the credit of others – hence, the exploding national debt.

All Americans, regardless of ideology, share an interest in solving the problem of the national debt. For if we do not take action and this debt is allowed to continue to grow the results will be catastrophic, and not for our children’s generation, but for ours. We will witness massive inflation of the U.S. dollar as the Federal Reserve pays off the national debt by printing money. And once this threshold is passed, once the Fed opens the door to “monetizing the debt”, all bets are off.