Following the report earlier this week about a proposal to increase Illinois’ property tax to pay for that state’s hundred-billion-dollar-plus shortfall in pension funding, Simon Black warns that the situation across the nation as a whole is just as bad.
On October 22, 1981, the national debt in the United States crossed the $1 trillion threshold for the first time in history.
It took nearly two centuries to reach that unfortunate milestone.
. . .
Today, the national debt stands at more than $21 trillion– a milestone hit roughly two months ago.
This means that the government added $20 trillion to the national debt in the 37 years between October 22, 1981 and March 15, 2018.
That’s an average of nearly $1.5 BILLION added to the national debt every single day… $62 million per hour… $1 million per minute… and more than $17,000 per SECOND.
But the problem for the US government is that this trend has grown worse over the years.
It took only 214 days for the government to go from $20 trillion in debt to $21 trillion in debt– less than eight months to add a trillion dollars to the national debt.
That’s an average of almost $52,000 per second.
Think about that: on average, the US national debt increases by more in a split second than the typical American worker earns in an entire year.
And there is no end in sight.
At 105% of GDP, America’s national debt is already larger than the size of the entire US economy. (By comparison the national debt was just 31% of GDP in 1981.)
Plus, the government’s own projections show a steep increase to the debt in the coming years and decades.
The Treasury Department has already estimated that it will borrow $1 trillion this fiscal year, $1 trillion next year, and another trillion dollars the year after that.
They’re also forecasting the national debt to exceed $30 trillion by 2025.
. . .
Last year the government spent HALF of its budget just to pay for Social Security and Medicare.
The situation is so dire that the government spends more than its entire tax revenue just on these mandatory entitlement programs, plus Defense and interest on the debt.
Even if you could eliminate entire departments of government, they would still be running a budget deficit and going deeper into debt.
. . .
It’s a financial death spiral.
Think about it: if the government is having this much trouble making ends meet when they’re paying 2% interest on $21 trillion in debt, what’s going to happen when they’re paying 5% on $30 trillion?
It’s foolish to think that this trend has a consequence-free outcome. No nation in history has ever become prosperous by borrowing record amounts of debt to finance reckless spending.
There’s more at the link.
Sadly, it’s not just the US government that is so profligate. Governments around the world have made the same mistake. Nor is it just at government level. Private US debt is also at astronomical levels, so great that many families and individuals are borrowing every month from one loan account or credit card, in order to pay the minimum balance due on another loan or credit card. That’s just as much of a financial death spiral, and just as sure to end badly.
I’ve said before that debt is killing us. I see no reason to change that grim prognosis.