Rising U.S. National Debt Could Lead to Dire Consequences
Mark my words: the U.S. national debt is going to create a lot of troubles in years ahead. If it’s not controlled now, there could be dire consequences.
You see, long-term debt is bad. If anyone tells you otherwise, don’t listen to them. You can’t expect good results if there’s a lot of debt and it’s increasing. It’s that simple.
At the time of this writing, the national debt stands at $23.2 trillion. (Source: “The Daily History of the Debt Results,” TreasuryDirect, last accessed February 7, 2020.)
And it has been growing at a very rapid pace.
In the beginning of 2008, the U.S. national debt was $9.2 trillion. So, in matter of 12 years or so, the debt has increased 152%. In nominal terms, the U.S. is hands down the most indebted nation in the world.
Sadly, it doesn’t look like the debt figure will come down anytime soon.
Step back a little.
How does the national debt grow? It all starts with the U.S. government incurring a budget deficit (it spends more than it receives in taxes and fees). Then the government has to borrow to pay for its expenses (and pay interest). The more the U.S. government borrows, the higher the U.S. national debt becomes.
Over the past decade or so, the U.S. government has been spending without remorse.
Just recently, even when the U.S. economy was doing fine, the U.S. government was running a budget deficit of close to $1.0 trillion. In 2020, we could see another budget deficit of $1.0 trillion.
Here’s the worst part; there’s no balanced budget in sight.
So, the U.S. national debt could be much worse in the coming years. It could even soar to $30.0–$35.0 trillion (if not more) by the end of this decade.
In the short term, rising national debt isn’t really an issue. But know this, in the long term, immense national debt leads to severe consequences.
Now, you really have to ask this question: who’s on hook for this debt, and how will the U.S. government ever pay it off? The national debt figures we see are not imaginary numbers. The debt needs to be paid at some point down the road.
Dear reader, this is where the problem comes. American citizens are on the hook for this massive U.S. national debt.
Imagine this: if lenders to the U.S. government all of a sudden come out and say, “Give us our money back,” what do you think the U.S. government will have to do?
The government could be forced to increase taxes and fees on all sorts of things. Plus, it would have to cut a lot of programs that the government currently provides, such as social security, Medicare, food stamps, etc.
For average Americans, this could be devastating. They are already struggling. New taxes and cuts to essential services could really hurt their well-being.
I will end with this: the higher the U.S. national debt goes, the odds of an economic and social crisis increase exponentially.