Will The National Debt Crises Be Addressed?
While Democrats and Republicans quibble over the intricacies and allocations of the national budget, no one seems terribly concerned about the government’s skyrocketing debt.
According to the United States Department of the Treasury, the American government will borrow 955 Billion dollars by the end of the 2018 fiscal year. This new trillion-dollar borrowing is 436 Billion dollars more than the last fiscal year.
With so many competing interests, it seems that no matter how much the government taxes, its needs grow ever larger. The tax cuts and following decrease in revenue necessitates a relatively proportionate decrease in government spending, as well as more efficiently allocated resources.
With Democrats spending on handouts and benefits and Republicans spending on military and infrastructure, every new piece of legislation requires more money. There are no major provisions with enough support to plausibly pass as of yet to significantly reduce spending, even though President Trump campaigned on the promise of lowering the debt.
The US government’s primary creditor, is, ironically, itself. Its borrowed money mostly comes from social security, private individuals’ and corporations’ bonds, or the Federal Reserve, who essentially wills money into existence and lends it to the US.
Of course, the problem with borrowing from an organization that creates money is that printing more money leads to inflation. Inflation crises have been utterly disastrous for other nations in the past. Such practices have rendered national currencies nearly worthless and caused prices of goods and services to reach comically high levels. The German Weimar Republic in the 1920’s and Zimbabwe in 2009 are two great examples.
But the debt problem isn’t limited to the Federal Reserve. There are also many foreign countries who have invested in the US. China in recent times has been viewed as the looming debt threat, owing $1.3 trillion of the government’s debt, but Japan too owes nearly that much ($1.1 trillion).
While people have argued since the creation of the US that some debt is good—namely to keep people and countries invested in the well-being of the nation, too much debt can bankrupt the government. It particularly becomes a problem when yearly loan payments become too high to pay off with the country’s GDP.
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