The United States National Debt
The US National debt is the accumulation of decades of government spending more money every month, every year, than it makes. This habit of spending more money every month than income generated by the government is referred to as the National deficit. And over time, the US government has spent $14.3 trillion more than it has made. Yes, the national debt is $14.3 trillion and the federal government has hit its limit.
Who does the US government owe? The US national debt is a measure of obligations owed to individuals and governments outside the US government (including other foreign nations) and intergovernmental holdings (such as Social Security.)
The current national debt is 98.6% of the gross domestic product (GDP – the market value of all the final goods and services produced within a country.) Several economists would argue the United States needs to maintain the debt to GDP ratio to be below 70%. Current estimates put the US national debt ratio to GDP 12th highest in the world.
The gross national debt has increased by more than $500 billion each year between 2003 to 2007. In 2008, the national debt increased by $1 trillion. In 2009, the national debt increased by $1.9 trillion. And in 2010, the national debt increased by $1.7 trillion.
Obviously, it is no surprise that the Standard & Poor (S&P – the United States financial service company which publishes financial research and analysis) downgraded the Unites States credit outlook to “negative” in April 2011.
And as the cash/currency in the world becomes less available, the reality of hitting a debt wall continues to mount. Some economist believe the world has hit its debt limit. And the streets of Greece and other countries should be a warning sign to get the US financial house in order.
Although the federal debt is a result of over spending across the board, the big ticket items are the obvious choices: national defense, health and human services, and interest on current debt.
Congress is now making bargains on reducing the national debt. President Barack Obama and other political leaders have said they would like to shrink the budget by $4 trillion over 10 years in hopes to begin reducing the national debt.
Leaders are looking at overhauling corporate taxes, individual taxes, Medicare, Social Security and several other big budget items. In the hallways of Congress, you hear talk of overhauling the hundreds of loopholes, subsidies, deductions and credits. You hear this country has to take major steps to reduce the national debt. The question is – will Congress really do what it needs to do. And whatever they do, will it be enough. The $14.3 trillion national debt is a pretty big hole to climb out of.
There is no question that the US federal government has to take on habits that families across the country have taken – cutting every expense down to the bone. The national debt crisis is a crisis that can’t be ignored.
Let the Government know something must be done. Sign the petition today.