The National Debt Crisis

The United States has had Federal Government Debt virtually every year of its existence as a nation, beginning with the money borrowed to finance the Revolutionary War.   Shortly after the ratification of the U.S. Constitution, the federal government debt was reported as $75 million. 

There has really been only one brief period in our history when the federal government debt was totally eliminated.  In 1835 under President Andrew Jackson, the national debt was reduced to zero, but it quickly grew into the millions again after that.

The first dramatic increase in federal government debt Read the rest of this entry »

The Budget of the United States Federal Government is a massive document detailing taxation and spending in the trillions of dollars.  Each year, Congress and the President approve a budget outlining projected tax revenues for the year and projected expenditures for the year.

If budgeted tax revenues exceed budgeted expenditures, then the federal government is said to have a budget surplus (this is rare).  If budgeted expenditures exceed budgeted tax revenues, then the federal government is said to have a budget deficit (this is normally the case).  When there is a budget deficit, the federal government has to Read the rest of this entry »

We’re hearing a lot about The National Debt in the news these days, and you may wonder why you should even care about the National Debt.  Like many other people, you may see this as a government problem, but not one that can affect you in your personal life.  So why should the National Debt matter to you?  I’d like to try to address that question in this article.

The fact that our federal government has a National Debt isn’t really a problem.  We’ve had one since the days of the Revolutionary War, and quite honestly, we wouldn’t be the great nation we are today if we hadn’t been willing to borrow money when necessary over the years.

The problem with our National Debt is that it’s Read the rest of this entry »

Reduce National Debt!  It seems to be a popular battle cry these days, but no one seems to know how to do it.  In fact, as far as I can tell, no one is even putting forward proposals on how to reduce national debt.

We hear our politicians talk about the “need” to reduce national debt, but month after month the federal government debt keeps rising.  The counter below gives an approximation of the national debt at this very moment.  I think you’ll notice it’s going UP, not down!

So how do we reduce national debt?  I have an idea that I think would work.  Read the rest of this entry »

How much is our National Debt Service?  Stated another way, how much is the interest on the United States’ National Debt?

In the fiscal year ended September 30, 2009, the interest on the national debt was $383 billion, making Interest Expense one of the largest components of the federal budget.  In fact, interest on the national debt accounted for over 27% of our 2009 federal budget deficit. That’s a lot of “National Debt Service”, but it could have been much worse.

Current low interest rates are keeping our national debt service numbers from being astronomical, but this will change in future years for two reasons. Read the rest of this entry »

The Treasury Department announced today that the National Debt has technically exceeded the National Debt Ceiling established by Congress.  The total National Debt, as released by the Treasury Department, is $12.135 trillion, whereas the debt ceiling limits federal government debt to $12.104 trillion.

The Treasury Department has some “accounting tools” it can use in such instances, giving the federal government breathing room of about $150 billion.  Otherwise, the federal government would not have the statutory authority to borrow money, possibly leading to Read the rest of this entry »