The ratio of national debt to GDP is at 105 percent, larger than the economy as a whole. In 1981, the national debt comprised a mere 31 percent of GDP. We are not moving in the right direction. The Treasury Department has plans to borrow $1 trillion this year, an 84% jump from last year.
When individuals borrow, they can use the money wisely to increase their wealth. That’s what happens when people make good investments. What does the government do with all this money? While some of it may be put to good use, the National Science Foundation’s spending $856,000 on having mountain lions run on treadmills can’t be termed prudent spending. Nor can the $2 billion spent on former President Obama’s healthcare website. In 2017, Brooklyn, NY spent $2 million on a 400 square feet restroom in a public park. Flushing money down the toilet?
Even the government’s legitimate spending is out-of-control. In 2017, half the entire budget went toward Social Security and Medicare. More than all tax revenues are spent on entitlement programs and defense. The rest is “borrowed,” and that creates interest payments. Of course, as the debt increases, so do the interest payments. Which means the government needs to borrow even more money just to pay interest on money it’s already borrowed. What happens when the U.S. debt reaches $30 million? President Trump is showing no signs of curtailing this spending/borrowing spree.
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