Our Debt Debacle is Really Dire
I periodically warn how dire the US debt situation is. For something without significant news coverage, it is incredibly dire. Look at the simple math: 1. The US govt is spending $6.8T ($6800 Billion) a year. 2. But its revenues from taxes are only $3.8T. That is a mega-shortfall! 3. So we continue increasing the debt, to fund the difference. That accumulated debt is now larger than our GDP (and the World Bank says that's past a tipping point for disaster). US govt is spending about $600B on interest each year, which is about 8% of its budget, and rising. If interest rates rise, interest payments will go much higher, and will crowd out other spending on stuff most of us want the government to provide, such as Social Security, Medicare, food assistance, police, courts, roads. Imagine a US with only half as much spent on those programs. It is wrong to assume we can just "grow out of it," as the debt is growing faster than economic productivity gains. The fix is to raise t...