Tag Archives: National Debt

When Federal Interest Payments Come To Exceed the Military Budget: Time To Stop Defending the Rest of the World, by Doug Bandow

Posted on January 10, 2023 | Leave a comment

Empires don’t generally live within their means, which eventually means the end of the empire. The U.S. is no exception. From Doug Bandow at antiwar.com:

Originally appeared at the American Institute for Economic Research.

A new year dawns bright, with the US hurtling over the fiscal cliff. The lame duck Congress voted for a pork-packed $1.7 trillion budget bill. As the saying goes, it’s only money!

At a time of enormous domestic need, Republican Senate leader Mitch McConnell pushed an extra $45 billion for Ukraine, declaring that Washington’s “number one priority” was supporting that nation. Kentuckians might wonder if their Senator had moved to Odesa, Kharkiv, or Lviv over the holidays.

Alas, this appropriation was small change compared to the overall “defense” (in fact, mostly for offensive operations) budget. Congress hiked military outlays to record levels, topping off the already-bloated Biden spending program at $858 billion. American taxpayers remain stuck subsidizing prosperous, populous Europeans, superfluous Middle Eastern monarchs, and cheap-riding Asian defense dependents.

Unwilling to raise taxes as it also shovels ever-more cash into social programs old and new, Congress simply borrows additional money as if loans need not be repaid. The publicly held national debt hit 100 percent of GDP and is heading toward the record of 106 percent set in 1946, at the conclusion of the worst war in human history. Within a decade the US faces trillion-dollar deficits for as far as government analysts can budget. By mid-century the Congressional Budget Office expects the debt/GDP ratio to run around 185 percent. And that assumes policymakers don’t do anything stupid, like approve massive new spending programs without paying for them. Which, unfortunately, is as certain as the rising of the sun.

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Posted in Debt, Economics, Foreign Policy, Geopolitics, Governments, Military, War

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Your Government Hates You, by MN Gordon

Posted on December 27, 2022 | Leave a comment

The government steals your hard-earned money, has plunged the country into debt, and has spent trillions on programs and wars of no discernible benefit to most of the American people. These are not the acts of an institution that loves you. From MN Gordon at economicprism.com:

“Fate is nothing but the deeds committed in a prior state of existence.” – Ralph Waldo Emerson

Capital Consuming Gluttony

Did you know that in fiscal year 2022, federal tax receipts as a share of gross domestic product (GDP) hit a near record high of 19.6 percent?

According to the U.S. Treasury, in FY 2022, total federal tax receipts and additional federal government revenue topped $4.90 trillion.  Yet, over this time, Congress spent $6.27 trillion.  The difference, the 2022 deficit, was $1.37 trillion.

The difference, of course, was made up with debt.  And year after year, decade after decade, these deficits have stacked up into a mega pile of debt.  Presently, the U.S. national debt is over $31.4 trillion.  As a reference point, in December 2000, the national debt was $5.6 trillion.

In other words, over the last 22 years the U.S. national debt has increased 460 percent.  U.S. GDP over this same time, however, has increased just 157 percent, from about $10 trillion to 25.7 trillion.

You’d think with all that cash coming in from near record tax receipts as a percent of GDP Washington could balance the budget.  Maybe it could even run a surplus and pay down some of the national debt.

President Andrew Jackson, for example, paid off the entire national debt in 1835 after just six years in office.  He then took the federal government surplus and divided it among indebted states.

Alas, that’s not how the U.S. government works in the 21st century, where near record tax receipts will never be enough.  Washington’s capital consuming gluttony is well beyond the reach of a human solution.  Nature will have to take its course.

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Posted in Banking, Crime, Debt, Economy, Government, History, Investing, Politics, Taxes

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15.7 trillion new reasons to be concerned about the national debt, by Simon Black

Posted on October 19, 2022 | Leave a comment

Gargantuan deficits become much more problematic when interest rates are rising. From Simon Black at sovereignman.com:

Last Friday, September 30th 2022 was the close of the Fiscal Year for the US federal government.

If you’re not familiar with the term, the ‘Fiscal Year’ refers to the government’s official accounting period. It starts on October 1st and ends the following September 30th. And everything from the federal budget to the Supreme Court’s case schedule is based around the Fiscal Year.

So are calculations for the national debt.

And based on the figures just released, the US national debt has now reached nearly $31 trillion as of the close of the Fiscal Year last Friday.

(If you want to see the number down to the penny, it’s $30,928,911,613,306.73)

At the start of the Fiscal Year back on October 1, 2021, the national debt was $28.4 trillion. So over the course of the past twelve months, the debt increased by a whopping $2.5 trillion.

That’s the second highest annual increase in the US national debt EVER, after the $4.2 trillion increase in the 2019-2020 Fiscal Year during the pandemic.

Now, a $2.5 trillion increase in the national debt is terrible, and alarm bells should be sounding from coast to coast. But there’s actually something more worrisome going on with the debt.

Remember that whenever governments borrow money, they do so by issuing some form of government bond. A bond, just like a loan, is a type of IOU. One of the key differences, however, is that a bond is a financial security that, just like stocks, can be easily bought and sold by investors around the world.

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Fatal Dependency, by David P.Goldman

Posted on April 22, 2022 | Leave a comment

What happens when foreigners decide buying U.S. debt with still microscopic interest rates, with the prospect of being paid back in rapidly depreciating dollars, isn’t such a good deal? From David P. Goldman at americanmind.org:

Gold coins with hundred dollar bills

America’s increasing reliance on foreigners to lend us money could crater the dollar.

The United States has borrowed $18 trillion from foreigners since the Great Financial Crisis of 2008, a staggering sum that is nearly equal to America’s annual Gross Domestic Product. The notion that the dollar’s dominance in world finance might come to an end was a fringe view only five years ago, when America’s net foreign investment position was a mere negative $8 trillion. Notably, the net international investment position fell by $6 trillion between 2019 and 2022, roughly the amount of federal stimulus spent in response to the COVID-19 pandemic.

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‘We the People’ Are the New, Permanent Underclass in America, by John W. Whitehead and Nisha Whitehead

Posted on April 19, 2022 | Leave a comment

Government debt and national bankruptcy are tyrannical. From John W. Whitehead and Nisha Whitehead at rutherford.org:

“We are now speeding down the road of wasteful spending and debt, and unless we can escape we will be smashed in inflation.”—Herbert Hoover

This is financial tyranny.

The U.S. government—and that includes the current administration—is spending money it doesn’t have on programs it can’t afford, and “we the taxpayers” are the ones who must foot the bill for the government’s fiscal insanity.

We’ve been sold a bill of goods by politicians promising to pay down the national debt, jumpstart the economy, rebuild our infrastructure, secure our borders, ensure our security, and make us all healthy, wealthy and happy.

None of that has come to pass, and yet we’re still being loaded down with debt not of our own making.

Let’s talk numbers, shall we?

The national debt (the amount the federal government has borrowed over the years and must pay back) is $30 trillion and growing. That translates to roughly $242,000 per taxpayer.

Now the Biden administration is proposing a $5.8 trillion spending budget that notably includes $813 billion for national defense, $30 billion to “fund the police,” and a plan to reduce the national deficit by roughly $1 trillion over 10 years through additional tax hikes.

It’s estimated that the amount this country owes is now 130% greater than its gross domestic product (all the products and services produced in one year by labor and property supplied by the citizens).

The U.S. ranks as the 12th most indebted nation in the world, with much of that debt owed to the Federal Reserve, large investment funds and foreign governments, namely, Japan and China.

Essentially, the U.S. government is funding its very existence with a credit card.

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Posted in Banking, Business, Civil Liberties, Debt, Government, Morality, Politics, Propaganda, Tyranny

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A Colossal Theft in Pain Sight, by Lawrence McDonald

Posted on December 28, 2021 | Leave a comment

Where did all that stimulus and Covid relief money go? From Larry McDonald at thebeartrapsreport.com:

What have we done with the $11 Trillion?

We have clients in 23 different countries, but most reside within the continental United States – in recent weeks, we keep hearing countless stories of self-proclaimed 24-hour turnaround testing centers to do a PCR test, then taking more than 80 hours to get the results back. Friends in New Jersey tell us not one pharmacy or walk-in clinic in a 100-mile radius has appointments available in the next week. Home testing has improved but for those traveling overseas – it is a PCR test that is needed.

The question that haunts us now is that, almost two years into this crisis and an $11 Trillion U.S. Fiscal and Monetary spending deluge, we still don’t have an adequate testing infrastructure? It blows us away –  we are still dealing with endless waiting lines, no availability of testing appointments, shortages of at-home tests and overwhelmed testing labs scrambling to process vials.  Where did all that money go?

State and Federal Debts Add Up

In the US, the corona crisis started on January 29, 2020, when the White House initiated its coronavirus task force. Since then, the US has gone from crisis to crisis and the media and our politicians have been obsessed with this epidemic and its consequences ever since. Amidst all the turmoil, the US government has left no stone unturned to throw money at this disaster. The Fed kicked off in early March by lowering interest rates to zero and shortly after began rolled out an alphabet soup of emergency programs. From buying high yield debt to bankrolling bailout checks (PPP loans), nothing was left on the table for our adroit stewards at the Fed. The byzantine maze of fiscal stimuli has left everyone confused. Nevertheless, the total amount of support the Fed has pumped into the economy is best measured by the expansion of its balance sheet. When the Fed finishes its asset tapering program in March of 2022, its balance sheet will have expanded by $5 Trillion. In less than two years the Fed deployed more money than during, and in the 10 years after, the great financial crisis ($3.5TR). This monetary support alone is also more than that of the entire GDP of Japan, the third-largest economy in the world.

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Posted in Banking, Business, Collapse, Crime, Cronyism, Debt, Economics, Economy, Government, Politics

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Government Debt is Taxation Without Representation, by Brian McGlinchey

Posted on October 4, 2021 | 1 comment

Does anyone recall voting for over $28 trillion in debt and over $100 trillion in unfunded liabilities? From Brian McGlinchey at starkrealities.substack.com:

A higher debt ceiling means a greater burden unjustly imposed on future generations

With Thursday’s passage of a continuing resolution that funds government operations until December 3rd, Congress dodged one fiscal cliff, but a bigger one looms ahead.

The federal government has maxed out its credit, and if Congress doesn’t raise the statutory debt ceiling by October 18, the Treasury won’t be able to cover all of Uncle Sam’s obligations.

With Democrats controlling the House, Senate and White House, Republicans have declared they’re leaving it entirely up to the Democrats to raise the ceiling through the budget reconciliation process. Democratic leaders and their media allies claim that would be too complex, time-consuming and risky.

However, if past experience is a reliable guide, we can expect a couple weeks of harsh rhetoric, media hype and hand-wringing that culminate in the debt ceiling being modified for the 99th time in its 104-year history.

That said, amid all the attention paid to the Capitol Hill debt-limit poker game that not only pits Democrats against Republicans but also progressives against moderate liberals, it’s easy to lose sight of a hard truth about America’s $28 trillion debt: As a burden that will fall on future generations, government debt is a form of taxation without representation and is therefore profoundly unethical.

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The US Government Is On Track to Top Last Year’s Record-Breaking Deficits, by Ryan McMaken

Posted on May 15, 2021 | Leave a comment

The US government goes from new high to newer high in deficits. The chances it will ever repay its debt with dollars whose value is anything approaching the value of dollars today is infinitesimal. From Ryan McMaken at mises.org:

The Treasury department has issued its spending and revenue report for April 2021, and it’s clear the US government is headed toward another record-breaking year for deficits.

According to the report, the US federal government collected $439.2 billion in revenue during April 2021, which was a sizable improvement over April 2020 and over March 2021. Indeed, April 2021’s revenue total was the largest since July of last year when the federal government collected 563.5 billion following several months of delays on tax filing deadlines beyond the usual April 15 deadline. (Not surprisingly, in most years, April tends to be the federal government’s biggest month for tax collections.)

In spite of April’s haul, however, the federal government managed to spend much more than that, with spending topping $664 billion during April. This means the federal government ran a sizable deficit in April of 225.6 billion. This was a middling sum compared to other monthly deficits this fiscal year (which began on October 1), but deficits are adding up fast.

For the first seven months of this fiscal year combined, the US government collected $2.1 trillion in revenue, yet it spend nearly twice as much: $4.1 trillion, or 90 percent more than it collected.

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Unconstitutional Debt and Future Generations, by Andrew P. Napolitano

Posted on April 29, 2021 | 1 comment

Not the least of the national debt’s many vices is that it’s blatantly unconstitutional. From Andrew P. Napolitano at lewrockwell.com:

Earlier this week, President Joseph R. Biden Jr. asked Congress to raise taxes and increase borrowing so his administration can spend $2.3 trillion — on top of the $1.9 trillion Congress authorized two months ago for so-called COVID relief — for thousands of projects he calls “infrastructure.” All this is in addition to the $2 trillion that the government borrows annually these days just to make ends meet.

These are serious numbers of dollars, the repayment of which will have seriously unpleasant consequences for future generations of Americans. Indeed, under Biden’s administration, the feds will borrow three times what they collect in taxes. This is not a new phenomenon, but it exacerbates the modern trend of spend now and pay later.

Under the Constitution, can the feds borrow as much as they want and can they spend it on anything they want? Here is the backstory.

When James Madison and his colleagues wrote the Constitution, they addressed the problem of debt. They knew governments borrow vast amounts of money to address emergencies, usually wars — as the 13 colonies had just done. When Madison and his colleagues were deciding upon the powers of the new federal government, they included the power to borrow money but excluded the power to create and operate a bank.

Madison understood that the Constitution limited the power of Congress to spend monies — whether obtained by taxes or debt — to the 17 discrete areas of governance delegated to the federal government in the Constitution.

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Some clear thinking on the yesterday’s massive deficit announcement, by Simon Black

Posted on April 16, 2021 | 2 comments

They have a name for countries where the government’s central bank is the largest buyer of the government’s debt: banana republics. From Simon Black at sovereignman.com:

Every single month, the US Treasury Department is legally obliged to publish monthly financial statements to the public.

This is typically a pretty boring ritual which attracts minimal fanfare; few people pay attention, or even care to look at the federal government’s accounting of its assets, liabilities, income and expenses.

Yet yesterday’s financial statements were pretty groundbreaking, as they showed that the US federal government deficit so far this fiscal year is an astonishing $1.7 trillion.

Bear in mind we’re only halfway through the fiscal year (which began in October 2020). So there’s a lot more red ink to follow.

That $1.7 trillion deficit figure doesn’t even include a lot of recent and pending legislation, including COVID relief, infrastructure, and all the other fantasy spending bills the Bolsheviks are putting forward.

Now, rather than focus on the headline figure, I’d like to take you on a quick tour of the federal debt today and have an objective discussion of what lies ahead.

First off, it’s important to understand that when the federal government goes into debt, it does so by issuing bonds; bonds are financial securities (like stocks) which entitle the holder to be repaid with interest.

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