Also known as the total public debt, the United States National Debt is the amount of money that the US government owes to the public due to federal spending. These federal spending includes those of states, foreign governments, corporations and individuals. Besides these, Treasury Bills, Bonds, Notes, US Saving Bonds and the local/ state government series securities are also included in the National Debt.
Where does the United States National Debt Stand?
Until November 2008, the National debt has piled up over $10 trillion, which is funded by the income taxes of the general public. Every year, since 2003, America has increased its debt by over $500 billion. There are many speculations about the reason why the National Debt has boosted up and reached the peak of debt since 1955 in George W. Bush’ administration. Three of these speculations are:
- His decision to invade Iraq
- His decision to lower the income tax of the rich
- His decision to deregulate Wall Street.
President Bush has ‘successfully’ contributed in raising the National Debt from $5.7 trillion to over $10 trillion now, during his terms in office.
How did the United States National Debt start?
Basically, the National Debt comes from the US government’s need to cover their increasing budget deficits that forced them to take a loan. As the government is unable to pay off money they have borrowed, there is an on-going need to borrow more and more money, which accumulate interest that has to be paid. As many families probably have experienced themselves personally, it does not take long at all for the debt to exceed the original loan amount. $9 trillion dollars has been lent to the US government since 1969 and one trillion of it is interest due.
How did the United States spending lead to National Debt?
The National Debt, as mentioned earlier, has accumulated a large amount of interest that has to be repaid. In 2008, $412 billion of tax payer money was used by the federal government to make interest payments. However, considering the way other tax money are spent, it is obvious that the US desperately needs to reverse the National Debt, learn how to spend money more wisely and allocate tax payer dollars more equally amongst the programs that are designed for the best of America and the public.
To compare the $412 billion dollars that was used to make interest payment in 2008 with the spending of the federal government, here is how much they allocated for other programs:
- $61 Billion was spent on Education
- $56 Billion was for the Department of Transportation
- $15 Billion was spent for NASA
While blaming and pointing fingers at the war in Iraq is easy, solving and reversing the National Debt is not. Even if the US government manages to stop their increasing budget deficit, it will not immediately turn things around. A lot of things need to be reformed to get the US economy back on track, besides cutting costs and spending.
How is the Federal Government failing America?
Many Americans now have lost their trust in the federal government. Taxes are in constant rise while it does not seem to be producing any results. As most of the tax payer dollars is used to make interest payment due on borrowed money, it is no wonder that tax payers do not see any development or improvement in roads, schools, environmental issues and others. Instead, what they do see is the increase in the taxes that are weighing down with no result in sight.
It is now a very heavy burden of the next administration to find a solution to the growing National Debt. It is not enough for the new government to cut illicit spending and reverse the National debt. Individual citizens and the nation as a whole have to be helped to recover and bounce back into a better financial future. As what we can see now is only darkness in the future, only God can help America.
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