$19 trillion in U.S. government debt Is the dinosaur in the room during upcoming presidential elections.
How big is $19 trillion?
$19 trillion in debt = stacked $1 bills going from earth to the moon and back 2 1/2 times. The moon is an average of 239,000 miles from earth. $19 trillion is $160,000 debt for every taxpayer.
So what are the prime candidates saying about this dinosaur in the room.
- Sanders – Run up more debt for the good of all.
- Trump – Haircut holders of American bonds.
- Clinton – let’s talk about something else, shall we?
- The average American citizen – what does it mean, $19 trillion?
- Federal reserve – The interest rate has an effect on the national debt?
We increased money supply and monetized debt. Get that? - Learned analysts and pundits – We don’t know what the fucks going to happen!
What does 19 trillion in debt mean?
Every 1% percentage point increase in the federal interest rate = $190 billion added to the national debt each year, or $1,700 per family. For instance, if interest on the national debt rises from .005 to .015 the deficit increases $190 billion a year (.01 x $19 trillion). This means low interest rates for the foreseeable future.
Older people receive little interest income on their life savings, forcing them to invest in an overvalued stocks and real estate.
The youth of America, in their lifetime, will either pay back a large share of this rapidly rising debt or eventually face a cataclysmic event affecting their way of life.
People with money may have to take a digit or two off their life’s savings. For instance, a $100,000 rainy day fund becomes $10,000 or $1,000. As an example Poland knocked off four digits from their money in 1995.
How did debt get to this stage? Before the twentieth century government was not expected to pay for education, housing, feeding the poor and indigent, medical, large public works, supplementing income etc. Wars needed to be paid out of pillage or taxes,.
Starting post Vietnam war, we accepted large deficits rather than sacrifice to balance the budget. We charged on a government credit card. Then, out of the University of Chicago came a dandy financial philosophy that if we lower taxes the savings will trickle down to the average person resulting in higher income and more total tax revenue. Thus fortified with that wisdom, we credit-charged budget deficits and didn’t save for the retirement of boomers. We continue to live beyond our means.
Politicians fear balancing the budget because groups compromised will not vote for them.
What can we do about it? Starting with presidential debates, let’s make sure candidates and our representatives in congress and senate address this dinosaur before it devours us. The banner: live within our means and balance the budget.
Don’t let candidates get away with flimsy rhetoric that addresses flimsy issues. Ask about the $19 billion now!
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