Well it is time to be reminded of that thing that never seems to effect individuals directly: the US Debt. Is it true? Does the massive US Debt, which now exceeds $15 TRILLION, mean anything to you and me?
Well, some might argue that pragmatically it does not affect normal Americans living their daily lives. I disagree.
The debt is a simple matter. In fact, this topic is so simple that a fourth grade student could understand its complexities. In recent history, the United States Federal Government spends more money than it takes in. Simple as that.
Why don’t we print more money? Inflation is one reason. The other is our creditors, China namely, would incur a devaluation of their loans if the Fed were to print more money. This gets into economics and the different mechanisms available to the Fed–like buying U.S. Treasuries on a massive scale (Quantitative Easing). I am happy to delve into these Fed tools at some other point in time, but that is not what we are talking about here.
We are talking about a spending problem. Imagine the US Government collected $100,000 this year in tax revenue. To put the current spending into perspective, Obama has amazingly broken another annual spending record. At this imaginary rate of revenue, Obama overspent by approximately $1,000,100,000. Do you see the problem yet?
Democrats and Republicans in Congress are currently in a tit-for-tat negotiation, vis-a-vi the ‘supercomittee’, to cut some of this spending. Democrats, while agreeing to cut a miniscule amount of spending, are proposing an increasing in taxes on the ‘rich’. Because we all know they need to ‘pay their fair share’. (Sarcasm abounds)
Ladies and Gentlemen, no increase in revenue could possibly come close to cover the annual US Government spending deficit–plain and simple.
The solution to this problem is growing the economy and reducing spending. Unfortunately, the Democrat controlled Congress is going to seek tax increases on the very sector of society that grows the economy and creates jobs. Can someone please tell me how this makes sense?
Did you know in 2008, the National Debt was approximately $10.5 Trillion? In nearly three years, Obama and the Democrat controlled Congress has managed to increase the National Debt by nearly one half of the total debt when this administration took control (nearly 4.5 Trillion Dollars).
That’s weird. MSNBC, Nancy Pelosi, Harry Reid, and Obama keep reminding me that this is all Bush’s fault….
A trillion dollars is such a large number, I have a difficult time conceptualizing it. You may have seen this exercise, but it is important to slow down and contemplate how much one trillion dollars really is. I am a visual person, so let’s look at this in a manner which we can understand.