I can't decide if my voice sounds more like McNulty or sherrod Brown
but either way it's not good twenty two trillion dollars that's twenty two with
twelve zeros after it twenty two trillion it's also a number it's the
national debt in this country which is bad what is it
before I get into that whole can of worms let's explain what the actual hell
we are talking about shall we every year the federal government spends
X amount of money takes in Y amount of money when X is greater than Y we create
a budget deficit when you add up all the annual budget deficits you get the
national debt think of it in your own life say you take in fifty thousand
dollars a year and you spend fifty five thousand that means you have an annual
budget deficit of five thousand dollars if you make and spend that same amount
for 20 straight years your personal debt would be five hundred thousand dollars
see that nailed it boom got it good so to put it very simply over the course of
our republic we have spent 22 trillion dollars more
than we have taken in which is this is a mathematical term a lot in fact the
national debt right now is the largest it has ever been in the last decade or
so we are adding to that debt at record rates at the end of 2000 for example the
national debt was seems manageable now five point six trillion eight years
later and roughly doubled to just over ten trillion now 22 trillion which makes
us the most indebted country in the world we did it
the US has almost always had some sort of national debt way back in 1789 the
Treasury Department was created to help us manage our debt by 1790 the country
was seventy five million dollars in debt maasai bar we now add that amount
seventy five million to the national debt roughly every hour now the only
time we paid it off was in 1835 under President Andrew Jackson and we have
been spending more than we've been taking in every year since 2001 now this
is bad right after all of you a hundred thousand dollars in personal debt you
are paying interest on that debt every year and
the amount you owe goes up so too does the interest payment now that's broadly
true for the government to federal government it's just like our lives
which does sound like a problem except for the fact that the Federal Reserve
which is essentially the Bank of the United States has kept interest rates
very low for a very long time meaning that the government's interest payments
haven't been all that bad ish in 2017 for example interest in our national
debt was two hundred and seventy-six billion dollars which was less than
seven percent of the total budget for the country in that year now back in the
90s when interest rates were higher our interest payments were more than fifteen
percent of our overall budget okay we're in the clear here's the rub with the
economy humming back to life the Fed has begun to raise interest rates and there
are currently two planned rate hikes in 2019 though the Fed has indicated it
could slow down that schedule if need be but it still means the amount that
government will owe on its that is very likely going to go up and it might go
way up the Congressional Budget Office has estimated that it's going to cost
the government nearly three times as much to pay off its debt in 2027 as it
does right now why how well because our politicians
don't act surprised to have done a few things over the past decade that have
sped up the difference between what we spend and what we take in the big one
course of recent vintage was the massive tax cut plan that President Donald Trump
and congressional Republicans pushed through and into law in late 2017 that
law is estimated to add one point nine trillion again trillion with a t 12
zeros to the debt by 2028 and before that President George W Bush
is seven hundred billion dollar bank bailout and President Barack Obama seven
hundred and eighty seven billion dollar economic stimulus package also helped to
drive debt through the roof and then there's the fact that the baby boomers
are getting older and older which shoots Medicare and Social Security costs
skyward with really no end in sight yet all that to the fact that Wars like the
one in Iraq and Afghanistan cost a whole lot of money so what do we
well there's a seemingly simple solution start spending less than we make every
year tightening our collective belts by among other things reforming massive
entitlement programs like well Medicare and Social Security sorry baby boomers
except those programs are popular just like tax cuts are popular and breaking
news politicians like to do things that are wait for it popular and politicians
hate to do things that are unpopular and they always do have this out the
National that isn't exactly like your personal debt if you all hundred
thousand dollars the only way you get out of debt is to save money by making
more and/or spending less the US government has a much easier option it
can just print more money and while you probably have to pay off your personal
debts within some time period the US government can theoretically carry a
massive debt forever in fact there's an argument gaining some traction in
politics these days that running a large national debt isn't really any big deal
at all that's called modern monetary theory and it relies on the two unique
traits of the u.s. debt number one the government can always print more money
and number two we never really theoretically have to pay it off
spend away the thinking goes on things like say the green New Deal a program
pushed by liberals in Congress that would overhaul much of the economy and
energy structures in society to deal with the urgent threat of climate change
the price tag no one really knows but let's just ballpark it in the trillions
now most people and that includes most economists don't have that who cares
attitude about our mounting debt the big concern is that if the economy hits a
major downturn it may be impossible with such a big debt for the Fed or anyone
else to stimulate the economy back into action and that could lead to inflation
or even hyperinflation where the cost of everything we buy goes way way up and
our currency starts to become not just devalued but essentially meaningless
that's not a pretty picture but it is the point we make new point episodes
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