Debt is the US’s worst long-term challenge, and it leaves all the others in the dust. From Simon Black at sovereignman.com:
On October 22, 1981, the national debt in the United States crossed the $1 trillion threshold for the first time in history.
It took nearly two centuries to reach that unfortunate milestone.
And over that time the country had been through a revolution, civil war, two world wars, the Great Depression, the nuclear arms race… plus dozens of other wars, financial panics, and economic crises.
Today, the national debt stands at more than $21 trillion– a milestone hit roughly two months ago.
This means that the government added $20 trillion to the national debt in the 37 years between October 22, 1981 and March 15, 2018.
That’s an average of nearly $1.5 BILLION added to the national debt every single day… $62 million per hour… $1 million per minute… and more than $17,000 per SECOND.
But the problem for the US government is that this trend has grown worse over the years.
It took only 214 days for the government to go from $20 trillion in debt to $21 trillion in debt– less than eight months to add a trillion dollars to the national debt.
That’s an average of almost $52,000 per second.
Think about that: on average, the US national debt increases by more in a split second than the typical American worker earns in an entire year.
And there is no end in sight.
At 105% of GDP, America’s national debt is already larger than the size of the entire US economy. (By comparison the national debt was just 31% of GDP in 1981.)
Plus, the government’s own projections show a steep increase to the debt in the coming years and decades.
The Treasury Department has already estimated that it will borrow $1 trillion this fiscal year, $1 trillion next year, and another trillion dollars the year after that.
They’re also forecasting the national debt to exceed $30 trillion by 2025.
To be fair, debt isn’t always bad. In fact, sometimes debt can be useful.
Businesses and individuals use debt all the time to shrewdly finance productive investments.
Real estate investors, for instance, often borrow most of the money they need to purchase a property once they determine that the rental income should more than cover the debt service.
In this way, when applied prudently, debt can actually help build wealth.
To continue reading: Breaking down America’s worst long-term challenges: #1- Debt