The US debt just hit 20 trillion dollars. That’s $20,000,000,000,000. If the numbers seems unfathomable to you, you’re not alone. It’s astronomical, it’s 13 0s, and it’s as scary as it is surreal.
But the bigger story isn’t the number or the size of the debt itself, it’s what the trend represents.
Year after year after year, the US government spends far more money than it collects in tax revenue.
According to the Treasury Department’s own figures, the government’s budget deficit for the first 10 months of this fiscal year (i.e. October 2016 through July 2017) was $566 billion.
That’s larger than the entire GDP of Argentina.
Since the government has to borrow the difference, all of this overspending ultimately translates into a higher national debt.
Make no mistake, debt is an absolute killer.
So how do we fix it? What’s the solution?
Cut essential government programs? Medicaid, Medicare, and social security do make up 52% of our spending. Continue to borrow from China? How could that go wrong?
The option we are left with seems to be to raise taxes, in order to increase our tax revenue, which is possible, and if you listen to CNN or Fox News for longer than 5 minutes, you will think we’re already doing it; but we’re not, and it’s unlikely we significantly increase taxes anytime soon.
Since ww2, overall tax revenue has held steady at 17%, albeit with a few variations. The only way to increase our tax revenue without affecting millions over American businesses and lives, is for the economy to grow just as rapidly.
How does that happen? By allowing it to grow unrestrained. Less regulations, more opportunities for innovation, and thus more people put to work, having more money to spend.
The problem? The national debt is growing much faster than the national economy. For example in fiscal year 2016, the debt grew by 7.84%, while the economy stalled at 2.4%, even as interest rates on mortgages, cars, credit cards, etc. were at an all time low.
This is a problem that isn’t going away, and the bombastic rhetoric politicians from all levels is continuing to be as useless as it is inflammatory.
It’s time for rational thinking to prevail, and it’s time for a solution.