National Debt Passes $35 Trillion – Are We Close to the End?

National Debt Passes $35 Trillion – Are We Close to the End?

Peter Reagan

We are living through an incredible period of economic history in the United States. It should be discussed in college-level economics classes for decades to come.

The national debt has surpassed a staggering $35 trillion for the first time in history. While that number is truly breathtaking (in a bad way), according to the House, here’s how that towering pile of debt breaks down:

• $104,497 per person
• $266,275 per household
• $483,889 per child

According to the same report issued by the House, just one year ago the debt was a mindblowing $32.65 trillion. That means it grew by a whopping $2.35 trillion over the past 12 months! So over the last year, this breaks down to:

• $196 billion in new debt per month
• $6.4 billion in new debt per day
• $268 million in new debt per hour
• $4.5 million in new debt per minute
• $74,401 in new debt per second

During the time I wrote this sentence, the debt pile grew by $700,000. Compare that to the median household income of $74,580 – this sentence cost the nation the TOTAL annual incomes of 9 ½ American families.

The federal government pays interest on its debt, just like everyone else. Over the last three years, the cost of interest alone on the national debt has doubled, to almost $1.1 trillion.

That means even if Congress got its act together and balanced the budget today, our debt pile would still increase by over $1 trillion per year!

Just how sustainable is the biggest debt mountain in the universe?

Fans of Modern Monetary Theory (MMT) are eager to tell you that government debt is an illusion. Janet Yellen isn’t willing to say that out loud, though she certainly acts as though it’s true.

Here’s a shocking observation of reality that might upset both the MMT crowd and their lead apologist, Paul Krugman:

When you borrow money, the lender expects to be paid back.

That’s the way borrowing works! That’s the way borrowing has always worked, throughout human history.

So when Krugman hand-waves away the national debt by saying:

…the debt we create is basically money we owe to ourselves, and the burden it imposes does not involve a real transfer of resources.

He’s wrong. Dead wrong. (Here’s a more detailed explanation.)

The champions of government debt look to an abstract ratio called debt-to-GDP to establish the sustainability of a nation’s debt.

More