We cannot help but notice that the news is dominated by dire forecasts of increasing economic difficulties. Reflecting on that, and the fact of a crucial election to be held that will determine who is going to be president and what political party will dominate Congress, we notice that more newspapers are mentioning the increasing U.S. debt that will, by next year, equal or exceed the gross domestic product of the U.S.

This puts the United States into the same fiscal category that other nations, such as Italy and Greece, who face the dim prospect of dealing with levels of debt that exceed the total of their GDP. For the U.S. to match this dismal fiscal record, one would have to go back to 1946, when the U.S. Congress approved countless expenditures to cover the cost of military operations that helped win World War II.

Increased expenditures now include massive outlays for medical testing and huge spending to help business and vaccine research.

Kate Davidson, a columnist of the Wall Street Journal, comments on the steeply increasing levels of debt in a recent article in that newspaper: “By the end of June, total debt has swelled to $20.5 trillion from $17.7 trillion at the end of March, a 16 percent increase over just three months according to Treasury Department data. Meanwhile, the economy shrank 9.5 percent in the second quarter, bringing debt as a share of GDP to 105.5 percent compared with 82 percent in the first quarter.”

An editorial in the Journal clearly shows that debt will explode in the next few years. “Then the pandemic hit. On present trend – that is, without a trillion-dollar bonanza – debt will exceed 100 percent of GDP 2021 and reach 107 percent of GDP in 2023. That would be the highest in U.S. history, exceeding the previous peak in 1947 at the end of the war to save western civilization. To put it another way, the U.S. government will soon owe more than the US economy produces in a year.”

Various economic analysts have pointed out that these increasing levels of public debt will not incline the government to become more aggressive in the present pursuit of monetary and fiscal policies that will require increased spending. The longer the U.S. debt lasts, the more resistant the U.S. government will become to requests for increases in investments in programs that historically have required large sums, such as the space program.

The Congressional Budget Office has reported that the deficit will not grow as quickly as it might grow because interest rates continue to remain low and are projected to remain low over the next 10 years.

Still, the debt held by the public is meaningful because that debt must be paid back with interest. It should be noted that entitlements such as, for example, Social Security, are not included in the amounts that have to be paid back; however, any administration of either party, that went back on the promises to pay Social Security will face the wrath of the American public.

One of the worrisome elements of these increases in public debt is the rapidity with which they have happened. The increases have been both rapid and large in the past 12 years. It does not take an economic pundit to conclude that the next years will be taxing for any government that is in control in Washington, D.C.

Author and educator Dave Kaplan writes from his home in Santa Barbara, Calif.

(16) comments

David Collins

Show me a poor president and I will show you a bridge in NYC for sale , cheap and only for today .

Yeah the country is deep in debt , deeper than ever . Could be the endless giveaways , foreign wars along with the rebuilding and aid to despots that never fail to live up to expectations . The waste , fraud and abuse when dealing with the Covid . New York is a prime example of runaway waste by a inept governor and mayor rivaling those in California . A house of rep. that endlessly demands more and more borrowed funds to finance the buying of votes and the speakers new 757 Boeing to scoot her cross country and back , nonstop of course , at her command . Could go on and on but hopefully you get the picture . Nobody who could stop this really cares . Not in their interest . Other than self servitude , not sure what their interest is .

mpjeep

Emergency spending in response to the pandemic, after years of steadily increasing debt, has taken the US to levels we haven’t experienced in 75 years.

Mandatory spending for SS, Medicare and Medicaid amount to almost 50% of US spending. And may increase each year as we all get older and in poorer health.

I remember as a young man, about 40 years ago, I was spending more than I was making, just like the US is doing now. Of course I wasn’t up against a pandemic as the US has been. Just living above my means.

I was borrowing, borrowing, borrowing (car loan, motorcycle loan and credit cards)…..stuck in a debt trap, with only 2 real options to rein in my debt. (I could have filed bankruptcy, but didn’t want to go that route).

My options, just like the US, was to cut spending and/or raise more income/revenue. I also had to make a realistic budget. How many presidents, including Obama, promised to go line item by line item of the US budget and make some changes. We all know of different studies and programs that could probably be cut or at least cut back or postponed. Do we really need to go to Space anytime soon? Do we really need to spend money studying the sexual life of quails on cocaine?

Some lawmakers, who blame China for the outbreak, want Beijing to foot the bill for the damages, including by canceling some of the debt the United States owes to China. But this would be like me filing bankruptcy. I, and the US, would no longer be a trustworthy borrower, with potentially dangerous consequences when times of real need for credit was required.

The debt won’t necessarily affect me, but my kids and grandkids will be deeply affected by this, if things are not brought under control and soon.

dc

Only difference in NY & CA leftist politicians controlling their residents' lives & futures is their locations. Some residents have had enough & are voting with their feet. Problem is they are packing too much of their liberal leftist ways when moving to more conservative areas so it may be better if they stayed put & not infect others' conservative way of living.. we already have enough of those born & bred. Social Security would be solvent if it had been left locked in it's safe. Could be wrong but believe it was LBJ who unlocked it for his Great Society. NC has a triple A bond rating because why? Think we'd have it had Cooper been given free rain by a majority R legislature?

dc

Sub word "rein" for "rain".

David Collins

Cooper , in his swan song , hopefully , is doing his best to change that bond rating . Spending for all kinds of harebrained projects after he bankrupted the DOT .

drewski

Swan song? You may find cooper will be reelected, not by carteret county but by the majority in the state. Despite what the usuals have said, this debt has been ongoing for decades, the lSt president to have a balanced budget was Clinton. If you dare, and just for fun overlay a graph of spending and debt with what party has the white house. No matter facts are so easily ignored when they don't suit the right wing agenda. Tax breaks for the wealthy, and big corporations, a ss holiday for the masses...The GOP is a disaster for the poor and the middle class a boon for the wealthy. If only you reelect trump then we will have peace and prosperity, a better cheaper health plan for all, prescription drugs will come free, in a box filled with unicorn horns, each one personally killed by don Jr.

mpjeep

Cooper has suggested to people out of work due to Covid to just hang in there, while he gives money to Big Business.

David Collins

Mp , is that like hanging them out to dry ?

dc

Except for imaginary horns might have got last part right. We were having prosperity until the CCP covered up virus, which the Left seems to appreciate, was released on the world & we are enjoying more peace than in a very long time. The president, who actually did something to deserve it, nominated for 3 Nobels. Most be killing BO & his band of crooks to see a president work his magic in the ME. Scratching their heads over his strategy.

dc

Sub "Must" for "Most".

David Collins

Oh , one more thing . Have you noticed that Cooper is airing like no re-election adverts ? Occasionally one here and there but not like the rest of the hopefuls . Must be real confident or .....>

mpjeep

Yep hung them out to dry. Not sure why, but NC normally votes for Liberal governors especially in the last 50 years. I believe only 2 republicans and they were one-timers. Coop is a little Hitler.

David Collins

Don’t know about Hitler , Hitler was far more charismatic . Cooper is just boring and smug . A common trait shared by H Clinton and now K Harris . All just a little bit smarter than we deplorable lowlifes .

mpjeep

*Cooper gives $18 million to USGA.

*Cooper gives $26.6 million to 5 out of state film production companies.

*Cooper has pledged $445 million to 22 large corporations.

*Cooper voted out of office: Priceless!

dc

He may be looking for a better paying job where he doesn't have to wear a mask & saving the advert $.

mpjeep

If Biden does pull of a miracle and wins, hopefully he will have a place in his administration for Coop.

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