U.S. National Debt Surged 112% Over the Past Decade
The U.S. national debt could be one of the biggest problems at hand. But sadly, it’s not being discussed these days. And it should, because massive national debt could create a lot of issues.
At the time of this writing, the U.S. national debt stands at $21.6 trillion. Based on the notional amount, the U.S. is the most indebted nation in the world. (Source: “The Daily History of the Debt Results,” TreasuryDirect, last accessed October 3, 2018.)
The rate of growth in national debt is scary, to say the least. 10 years ago, the U.S. national debt stood at just $10.18 trillion. That means it has increased over 112%.
Mind you, the last eight years have been a great time in the U.S. economy. Gross domestic product (GDP) grew, the unemployment rate declined, the stock market soared, and more.
Based on those eight years, one would assume that debt would decline. It didn’t.
National Debt Expected to Increase
Here’s the worst part: the U.S. government continues to spend without remorse.
In fiscal-year 2018 (October 2017 to September 2018), for the first 11 months, the U.S. government posted a budget deficit of $898.1 billion. In contrast, for all 12 months of fiscal-year 2017, it posted a budget deficit of almost $665.9 billion. That’s a year-over-year increase in government spending of close to 35%. (Source: “Monthly Treasury Statement,” U.S. Bureau of Fiscal Services, last accessed October 3, 2018.)
If you think the spending is going to decrease anytime soon, you could be very mistaken.
According to the Congressional Budget Office (CBO), the U.S. government’s budget deficit is expected to increase to over $1.0 trillion by 2020. And between 2018 and 2028, the budget deficit is expected to accumulate to over $13.2 trillion. This means that, by 2028, the U.S. national debt could be as high as $34.0 trillion. (Source: “10-Year Budget Projections,” Congressional Budget Office, last accessed October 3, 2018.)
Keep in mind that these are very optimistic figures. The CBO didn’t really take into account possibilities like a major recession/financial crisis, natural disasters, and wars. If the U.S. economy goes through trouble, expect that number to be much bigger.
I am not even going to talk about cities’ and states’ pension funds being severely underfunded, social security, and other things that could cause the national debt to surge in no time.
Why Does It Matter?
Dear reader, more debt is never good. If you borrow money and then continue to borrow, there comes a point when your bank will say it’s unsure if it wants to lend you more money.
For companies and countries around the world, it’s the same case: if they borrow too much, their creditors pull back. The U.S. government is no different.
It doesn’t look like the United States’ creditors are scared yet, but one has to really wonder when that will change, and when they’ll start worrying about getting their money back. The day those creditors start pulling back could be the day we see a major impact on the U.S. dollar—it could even crash.
I know the U.S. national debt is not a big issue for many right now, but it could become a major trigger for financial collapse.