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The $37 Trillion Problem: Addressing Our Ballooning National Debt
The US has had a deficit in the federal budget in 59 of the last 63 years. With no mechanism in place to ever repay the bonds sold to finance each deficit, the total public debt is exploding.
The total U.S. debt has reached an alarming $37 trillion and is skyrocketing by nearly $2 trillion each year. This is a serious situation that must be confronted immediately to prevent an unbearable burden falling on our children and grandchildren. But how did we get here?
Starting in 1962, a shift occurred when economists persuaded the Kennedy administration that the federal budget didn’t need to be balanced annually. They argued that, despite potential risks, the benefits of a consistently stimulated economy outweighed any drawbacks. The country could carry debt.
Once that philosophy took root, the government ran a deficit in 59 of the next 63 years. This led to the sale of trillions of dollars in bonds, primarily in $10 billion or $20 billion increments to the public. Over time, foreign investors, drawn by the perceived safety of U.S. bonds, purchased trillions worth of this debt.
A significant challenge arose when 10- or 20-year bonds matured — there was never any money available for repayment since the government was still deep in deficit mode and issuing more…
