The National Debt for Dummies... April 26, 2025
Quote:
The National Debt is the amount of money the federal government has
borrowed to cover the outstanding balance of expenses incurred over
time. In a given fiscal year (FY), when spending (ex. money for roadways)
exceeds revenue (ex. money from federal income tax), a budget deficit
results. To pay for this deficit, the federal government borrows money
by selling marketable securities such as Treasury bonds, bills, notes, floating
rate notes, and Treasury inflation-protected securities (TIPS). The national
debt is the accumulation of this borrowing along with associated interest
owed to the investors who purchased these securities. As the federal
government experiences reoccurring deficits, which is common, the national
debt grows: Unquote.
The above is the opening paragraph from the U.S. Treasury website explaining how
the U.S.'s National Debt is managed by the government. It doesn't say that they
go to "Mort's Easy Loan Company" and borrow $36 trillion and now Mort is
demanding his money, putting the country on the brink of bankruptcy.
The huge sum includes the SSA, Medicare, Medicaid, the cost of running the government,
aid to the states for emergencies, natural disasters and the military et al.
In a nutshell:
The National Debt is what the country has begged, borrowed and stolen (from the people
mostly) to pay for the goods and services that the people need to live their lives in a relatively
safe environment.
The Gross Domestic Product
(GDP) is more than capable of covering the National Debt at an equal GDP/ND ratio. A slight
deficit, of say, 17 percentage points from solvency is
quite acceptable; no country's in a hurry to pay it off, because it's a bridge to conversations
between all nations about trade, immigration, and the like. The US has never paid its national
debt off but once since the Revoulutionary War. It led indirectly to a major depression during
Jackson's terms. Be careful what you wish for.
Like "trade balances," the National Debt means what you want it to mean and the risks inherent
in 'inbalances" are usually exaggerated for political voodoo. Politicians are not the only liars in
the world, but they've developed falsehood into a language that like twins, only they can understand.
But the conventional wisdom says, that "numbers don't lie." Here are some of them:
Biden's administration was not the horror story that the GOP wanted to convince the public that it was.
Here are
Biden's Final Numbers.
Trump's first administration was not "the golden age" that he would have you believe it was. Read
Trump's Final Numbers.
You can't blame Covid for everything. If you could, Biden would have more to bitch about than Trump.