This week’s CBTV show is entitled, “Unhealthy State of the Union: Our National
Debt is Now Growing Faster Than the Economy.”
For the first time since World War
II, our national debt has reached the same level as the total production value
of the country’s economy. In other
words, the national debt, which is the amount of money the country owes to its
creditors, combined with IOUs to government retirement programs and other
initiatives, now tops $15.23 trillion.
This now equals the value of all goods and services the U.S. economy
produces in one year’s time. With the
debt ceiling expected to rise by another $1.2 trillion dollars sometime this
month, the national debt will officially surpass the country’s annual economic
output.
The ratio of U.S. debt to GDP has now
officially hit 100%, and it’s rising.
The last time the ratio of national debt to Gross Domestic Product
topped 100%, was just after World War II.
GDP measures the market value of all goods and services produced within
a country during a specific time period, usually on a quarterly or annual
basis. National debt is defined as the
total amount of debt owed by a country, both internally, as well as externally
to foreign lenders. The ratio of
national debt to GDP reached 121% in 1946, one year after WW II ended. That is the highest ratio in U.S. history and
understandably so. The U.S. spent an
estimated $341 billion dollars fighting World War II, and the U.S. GDP didn’t
top that figure until 1952. After the war
was paid for, the national debt to GDP ratio decreased incrementally over the
next 35 years, falling to just 32% of GDP by 1981.
When the debt ceiling rises to $16.4
trillion dollars this month, more borrowing and spending is expected to
continue through the rest of 2012. In
fact, the Congressional Budget Office (CBO) has already estimated the
government will run at a deficit of $973 billion dollars for Fiscal Year 2012,
which started on October 1st of 2011. That number will top $1 trillion dollars for
the fourth year in a row, if the payroll tax cut and emergency unemployment
benefits are “extended” for the rest of the year, as expected. What’s worse is
that President Obama’s 2012 budget projects U.S. debt rising above $26 trillion
dollars in just a decade from now, making this alarming trend of debt growing
faster than the economy a real concern for all of us who live in this country.
Just how bad is the state of the U.S.
national debt? It’s so bad that every
working American would need to give up one year’s salary to pay it off! Some have argued that raising taxes is the
easy solution, but who wants to pay more in taxes to fund the governments
continued spending. Taxes at the end of WWII were increased to pay for the cost
of defending the U.S., which was a noble cause, and one that most Americans
supported. But in today’s scenario, the
money the government spends seems to be out of control with no accountability.
Take for example how it funds companies such as solar-panel manufacturer
Solyndra for half a billion dollars, only to have the company file bankruptcy a
short time later. No matter how much
money Americans pay in taxes to our government, our elected officials are still
the ones who are making the important decisions on what to spend our money
on. They need to wake up, and decide on
a plan to significantly cut spending and start digging us out of this seemingly
bottomless pit, before it’s too late!
Again, I’d like to hear from you on
this important topic that can ultimately affect all of us, as well as our
children and grandchildren. Are you concerned about our national debt
increasing by leaps and bounds or do you think it’s no big deal? Until next
week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!
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