The Utterly Unbelievable Scale of U.S. Debt Right Now
February 18th, 2019Via: National Post:
This week, the United States national debt ticked above US$22 trillion for the first time, an amount equivalent to $67,000 per U.S. citizen.
The U.S. federal government owes more money than any other institution in the history of human civilization. And it’s just getting worse. According to the Congressional Budget Office, in only 10 years the U.S. debt-to-GDP ratio will be higher than any point since the Second World War.
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Holding a $22 trillion pile of debt is not cheap. Although the United States benefits from ludicrously cheap interest rates on its treasury bills, in 2019 it will spend $383 billion just to service its debt. By 2023, interest payments are expected to be larger even than the U.S. defence budget. Even now, $383 billion dwarfs the entire federal budget of Canada.
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Throughout U.S. history, periods of massive debt accumulation have usually coincided with bad times: The Great Depression, the Civil War, etc. By any economic measure, however, the United States is currently doing fantastic. Major foreign wars have been stepped down. The jobless rate is at a 49-year low. Economic growth has been topping four per cent. The last time the U.S. economy was this good, the federal government was running budget surpluses to pay down the debt, rather than piling up debt faster than ever. The implication is that when the boom inevitably ends, U.S. deficits are set to explode even faster. “The economy is going well and we are looking at deficits that are four per cent of GDP going forward,” Congressional Budget Office director Keith Hall said in late January. “That is an unusual thing.”
