This is a national debt clock.
It's been in York since the late 80s, and it shows a gross national debt
that we as a nation owe countries, companies and people
that lent us money almost exclusively in the form of bonds.
Back in 1989, it was just shy of $3 trillion.
Today, it's north of $30 trillion.
And if you look at it by household, there's a reality check,
more than $300,000 owed per household.
many worry that a confluence of factors, is going to send the US
into a debt spiral.
The US routinely
is spending more than the country and the government is taking in.
So we are living beyond our means By the end of this decade, the U.S.
is set to spend more each year paying interest on international debt
than it will on national defense.
And that's not because military spending is decreasing.
The reason is because servicing that debt has become so expensive.
As it stands today, the US Treasury Department spends $1.8
billion to pay the interest on our existing debt.
By 2033, that number will be closer to $4 billion.
the money that we pay every single day to finance our deficit cannot be spent
on roads, bridges or infrastructure or our children's future.
It is just being spent to finance our deficit.
So how did the U.S. get here?
For two decades after the clock
first appeared, the national debt was considered manageable.
But that all changed in the wake of the 2008 financial crisis.
When two things happened, the U.S.
economy shrank and borrowing increased.
our economy plunged and we had a lot of deficit
spending to try to revive it.
that's when the current trajectory really grabbed a hold of the country.
by 2013, the continued slow growth, even though it had picked up
and the rising debt put it above 100% for the first time ever.
So our debt was above the size of our economy.
This comparison is known as the debt to GDP ratio,
and it's often used by economists to gauge the fiscal health of a nation.
Even though that was a high level, it pretty much stayed flat
for about a decade.
That is until everything changed
Covid happened and our
borrowing catapulted higher sending checks to businesses and consumers.
The Fed did their part, cutting interest rates to near zero.
while that was helpful, that ended up sparking spike in inflation
that eventually led to higher interest rates
as the Fed had to pivot to combat inflation.
Shutdown. Shutdown. Shutdown The Democrats have never wanted to stop
the amount of spending How do you explain to taxpayers that makes any sense?
Every year, Washington plays political football,
avoiding the hard decisions to balance the budget.
an 11th hour compromise always saves the day, but it also kick
the can down the road because the underlying problem isn't fixed.
This hasn't escaped the eyes of our U.S.
credit rating agencies.
Fitch recently downgraded the US credit rating by one notch,
taking it off triple-A, it was a historic decision
based on a lot of wrangling in Congress over our deficit.
And it also had a lot to do with some of the political instability
that the world has seen coming from Washington, Fitch
predicted that by 2025, the debt to GDP ratio will be 118%.
And that number is three times the average of other similar countries.
They're basically saying, Washington, you are still on notice
But here's the thing.
There are real life solutions for the US to reach a healthy debt equilibrium.
But as you can imagine, none of them are easy.
One is, if the economy simply grew stronger, we're currently growing,
but not that much, So that may be highly unlikely to be the answer.
number two is that if in Washington they could agree on spending cuts,
We would have to see cuts in health care, Medicare, military spending.
number three is if we could increase taxes.
Something else that politicians don't like to do, especially in election years.
Rapid growth, spending cuts and increased taxes
were all elements of the Clinton administration's balanced budget,
which at the time was projected to pay off the national debt by 2012
but the role that government played through the great financial crisis
and the pandemic has changed the country's economic landscape dramatically.
Democrats and Republicans alike have used the public purse to stave off catastrophe
and revive growth.
Neither has made attempts to cut the deficit.
It's really easy for Republicans to blame Democrats or Democrats
to blame Republicans for the problems that we currently have in our trajectory
Both parties have made decisions that have led
to the immense deficits that we have right now.
as terrifying as the current debt trap is.
What's more scary is that politicians in Washington are using it as a cudgel.
we don't see enough moderates who are willing to reach across the aisle rather.
Parties are being pushed to opposite ends of the political spectrum
so that it's going to be get harder and harder to find ways to face our poor
fiscal management.