The national debt remains one of the most important issues facing the United States today. Since the beginning of the President George W. Bush administration, the country’s overall debt levels have soared drastically, which has led to a number of different proposals that would diminish this burden, including tax increases, budget cuts or both.
When President Obama entered office, he pledged to tackle the national debt but one report has found that the national debt has actually grown by $7.06 trillion to a grand total of $17.6 trillion. This equates to more than $61,000 per household, a figure that is more than the median household income.
Report authors argue that this debt increase is higher than under any previous president, and has surpassed the combined 2013 economic outputs of nations like France and Germany.
“The massive amount of debt the country has taken on in the past six years has put the nation in a vulnerable position as entitlement spending is set to take off and big-spending policies continue to pile on debt,” the Daily Signal wrote in its report. “This is bad news for tomorrow’s Americans who could face slower economic growth and higher taxes as America’s mounting debt continues to climb and outpace growth of the economy.”
Debt isn’t the only issue facing the U.S. When one calculates all of the unfunded liabilities then that figure actually swells to more than $120 trillion: Social Security ($15.83 trillion), Prescription Drug ($20.1 trillion) and Medicare ($81.2 trillion). Some economists have actually pegged the total debt level to be more than $200 trillion.
In order to address this problem, the Daily Signal recommends tackling entitlement spending because “continuing to put off the problem will leave the next generation more indebted and economically weak than any before it—and that is not the American way.”
Furthermore, interest payments are expected to continue to grow. According to the Senate Committee on the Budget, annual interest payments will reach $763 billion by 2023 – it should be noted that the report cited this number only if interest rates remain the same; so if rates get raised then debt payments could surpass the $1 trillion threshold.
The federal government doesn’t seem to be taking any drastic measures to reduce debt and budget deficit. The Congressional Budget Office (CBO) has reported over the past three years that the budget deficit will return to the $1 trillion mark within the next several years, which will then add an extra $7 trillion to the debt by 2024. The CBO also found that the U.S. debt will likely exceed the gross domestic product within two decades.
“Economic growth will be slower in the future than it has been in the past, CBO projects, largely because of a slowdown in the growth of the labor force resulting from the retirement of the baby boom generation, declining birth rates and the leveling-off of increases in women’s participation in the labor market,” CBO stated in the report released in July.
In recent months, the national debt has taken a back seat to the growing strife in the Middle East and Eastern Europe. However, with the debt limit debate already around the corner, the nation’s financial picture may be put under the spotlight again.
