We hear a lot about government debt, also known as the public debt, during election season. However, once the votes are cast, the topic seems to fade from the collective conscience of America. That is dangerous. Government debt is a very real problem that should be important to every American citizen.
Strictly defined, the government debt is the total amount of money the United States owes on outstanding securities, such as bonds and loans. At the time of this writing, that number was at $17.9 trillion and growing. That works out to a stout $153, 390 per U.S. taxpayer. Again, that number is growing every second of every day.
So why is this important? Because every dollar the Government adds to the debt increases the amount of monthly interest paid to service that debt. Think about it in terms of your credit cards. If you purchase $1,000 worth of Christmas gifts this season, an APR of 9% means you will increase your annual interest payment by $90. What happens if you continue to charge purchases to your card faster than you are paying the card off? You eventually reach your credit limit.
What do you do next? Some people apply for a new credit card and start the process all over again. Nevertheless, doing so will likely lead to eventual bankruptcy, or worse. That is why responsible consumers do not go that route.
When the Government reaches its credit limit, Congress simply raises that limit. Nonetheless, it cannot do so without consequence. Eventually the amount of interest being paid will consume the entire national budget, which will, in turn, leaves us no money to spend on anything else — including social security, healthcare, national defense, etc.
The government debt should concern every citizen because we will all be severely impacted if the Government goes bankrupt. If we simply ignore government debt and continue to allow Washington and our state capitals to spend without constraint, we are dooming future generations to a new depression that will make the Great Depression of the 1920s and 30s look like a birthday party.
Sources:
- U.S. Debt Clock — http://www.usdebtclock.org/
