The Burden of the National Debt

A big reason why most Americans feel like they don't get anything in return for the tax dollars is because too much of their money goes toward servicing the national debt. Thirteen percent of the budget is dedicated just to paying interest on the debt. That's 13% of what you pay in taxes that goes to NOTHING! We, as taxpayers, pay $900 BILLION every year to pay off interest on our debt. That's more than we spend on defense and it means that the average family of four pays $10,000 in taxes literally for no reason other than to hold off the country’s debt collector.

Our national debt ($34.5 trillion) is more than the entirety of the US Gross National Product ($28.8T).  We could take every dollar that every person and every business earns in the next year and put it toward the national debt and STILL owe almost $6 trillion.

Everyone knows this yet somehow our government never does anything to address it. Both Republicans and Democrats give lip service to balancing the budget then they don't. And balancing the budget isn't enough! We have to reduce our debt. That means allocating money in the budget not just to pay the interest but to actually reduce the debt.

Look, we're in a bad place. No one likes paying off debt but we're here now and we have to do it. But balancing the budget isn't enough. You know that. You know that meeting the minimum payments on your credit card never reduces what you owe. It's just money lit on fire. That's what both parties have been doing for decades. It has to stop now.

Only vote for candidates who are truly committed to reducing the national debt.

Some of the problems we need to solve are generational. One example is the national debt. The debt is currently larger than the entire gross domestic product. We couldn’t pay off our debt if we took every dollar that every person and every company earned in the next year and put it toward paying the debt. Even if we did, we would still owe six TRILLION dollars.

It took us a half a century to get into this mess. It’s going to take us decades to get out of it. We want our leaders to think in terms of generations. The Iroquois Nation did this. They had something called the Seventh Generation Principle where every decision a leader made had to consider the impact not just on the short term but on the next seven generations.

Compare this to our leaders who can’t think past the end of their two or six year term and you can see how the Republicans and Democrats dedicated to their own re-election could screw everything up so badly. Another reason for term limits, but that’s a different discussion.

Seven Generations is a bit hard to comprehend for the average person. We like to think in terms of five generations. Five generations has a direct connection to us because five generations equates to the grandchildren of our grandchildren.

You would never want to hurt your children or your grandchildren. You would be heartbroken if you made a selfish choice that hurt your grandchildren. Well, your grandchildren will have grandchildren at some point and the pain of their grandchildren will directly hurt them, just like the pain of your grandchildren directly hurts you. So if you do not want to hurt your grandchildren (and you don’t) then you need to consider how your actions hurt THEIR grandchildren. 

So that’s five generations out (yours, your kids, your grandchildren, your kids grandchildren, and your grandchildren’s grandchildren). That should be our timeline when we make decisions. 

Now a generation is roughly twenty years. So five generations out is one hundred years. That should be our target. We should be considering the impact of our actions and decisions one hundred years in the future.

Why is this important? Well, because as we said, it is going to take a long time to solve problems like the national debt, income inequality, and global warming. If we try to solve them within the term of a single President, the problems are insurmountable and are therefore brushed aside for some future generation to face.

But we’re not like that. We are trying to build a brighter future not just for ourselves but for the grandchildren of our grandchildren. That gives us the ability to take on the biggest issues facing our country and mankind as a whole. This kind of vision and leadership is what makes greatness. That’s our goal.

Only vote for candidates that consider the impact their decisions will have one hundred years into the future.

The national debt problem feels impossible unless you think in terms of generations. But if we do so, its hard but actually not as scary as you think.

First off, some assumptions.

The International Monetary Fund recommends that advanced economies like the US should have a 60% debt to GDP ratio. We’re at 120% so basically double what it should be. So that’s our target.

One hundred years from now our debt to GDP ratio must be a healthy 60%.

There are two big unknowns that impact our calculation. The first is GDP growth. Annually, the US GDP has grown about 2.8% per year over the last one hundred years. Now, the Republicans are currently in the process of squelching that growth but let’s assume we get back on track and 2.8% is sustained for the next hundred years as well.

The second big unknown is what interest rate we pay on our current debt. Last year we paid 2.35%. So, again, let’s use that as our number and assume we will pay 2.35% on our debt over the next hundred years.

Feel free to do the math on your own but to meet our goal of a 60% debt to GDP ratio one hundred years in the future, we need to run a surplus of $220 billion per year. That’s not that much!  For reference, the Republicans just gave ICE a (completely unnecessary and wasteful) $170 billion budget.

Unfortunately Republicans and Democrats are incapable of even passing a budget much less one that consistently runs a surplus. Since 2001 we have run a deficit every single year. However, in 2000 we had a budget surplus of $236 billion. That’s it! That’s all we need! And we did it just twenty-five years ago!

So, while the national debt seems impossibly large, its not insurmountable. It just takes reasonable people dedicated to improving the future for the grandchildren of our grandchildren. 

The problem is, as always, is the leadership of the Democratic and Republican parties. It is yet another reason why they need to go. We must consistently elect leaders who are dedicated to running a $220 billion surplus every year and using that surplus to reduce our debt.

Don’t vote for anyone who fails to meet that requirement!