Over at EconomicFreedom.org, Sam Patterson wrote an informative blog post entitled “We’ll Never Know the True Cost of the National Debt,” which is worth highlighting. Throughout the piece, Patterson throws out some disturbing numbers that should concern all Americans.
In 2000, U.S. national debt was about 57% of GDP … today it is a full 102%.
The Congressional Budget Office (CBO) projects that in 25 years our debt will be double our GDP, meaning we will owe more than twice the value of all goods and services produced in America in an entire year.
We are adding more than $1 trillion to it every year. If we continue spending at that rate then, in the coming decades, the interest on the debt alone will be nearly impossible to pay.
These are sobering figures, and prove that easy political promises don’t necessarily translate in the real world. For a visual representation of just how out of hand government spending has gotten, Patterson provides a fantastic chart that demonstrates how spending drives the debt:
Given the gravity of the situation, what can we do? At the Coalition to Reduce Spending, we believe the most impactful way to change the way DC works is through outside pressure. The magnitude of our debt problem requires citizen engagement that creates a new incentive structure for our elected officials. First, Americans need to be educated as to the extent of the issue, and how it directly impacts them. (Can each taxpayer afford their $113,000 share of the debt?).
Then, these voters need to challenge the Washington culture by demanding their representatives stop saddling them with unsustainable debt – which is why we’ve crafted our Reject the Debt pledge, which we we hope you’ll encourage your Congressman and Senators to sign so that together, we can hold them accountable. When the men and woman in DC feel they don’t have to answer for their behavior, they will behave accordingly, hence our current situation.
After all, the massive borrowing and spending the politicians in DC engage in is ultimately everyone’s problem, because together, all Americans will have to bear the consequences.
As Patterson explains:
Despite the drawbacks and risks, many of us are willing to go into debt for an education, to start a business, for reliable transportation, or for housing. In other words, we decide that there are instances when the benefits of borrowing money are greater than the costs of paying it back.
The federal government is supposed to be making the same calculation—looking at the risks posed by having debt, then deciding whether or not the benefits of the loan outweigh the risks. But that isn’t what the government is doing. Borrowing from foreign countries to enable current spending is now the standard operating procedure in Washington, no matter what the drawbacks of borrowing or the risks involved.
Clearly, our government is far beyond the point of borrowing responsibly as a means to create economically viable outcomes in the future. What the politicians in Washington have done is create a system that is ultimately unsustainable – and it’s up to us to call upon them to reverse course.