The National Debt

     When Ronald Reagan left the presidency in 1989 the National Debt was about 2 trillion dollars, up from 1 trillion when he started in 1981 and the Democrats were outraged (I was one of them). The National Debt is now heading toward 15 trillion dollars ($15,000,000,000,000) and with the expense of Obamacare and our present government's liberal policies, there will be no prospect in the foreseeable future to pay it down. How did the Democrats go from touting balancing the budget at the end of Bill Clinton’s presidency to the deficit spending that we are now experiencing?

The cost to run the U. S. Treasury in 2008 was 550 billion dollars which includes the interest on the National Debt. The current rate on a 5 year Treasury Note is 2.75% and based on that rate the annual interest on the debt would be about 330 billion dollars. During the years 1980 to 1982 the interest rate on a 5 year treasury note was between 11.6 and 15.9 percent; and home mortgage rates were at 16 percent for a 30 year fixed. The interest on the National Debt based on a 1980 (Jimmy Carter) 12% rate would be almost 1.8 trillion dollars ($1,800,000 million). Unless you have a budget surplus and spend less money than you take in, the National Debt will continue to rise and the interest that has to be paid will escalate at an accelerated rate. You can equate this to borrowing money on your credit card in order to make your next card payment. When you have a downturn in your personal revenue (like the government is having at present) something bad is going to happen sooner or later. What do you do when your debt interest and entitlement spending exceeds your income?

The way the government presently controls inflation is by lowering the prime lending rate, but now they can't make it any lower than it presently is.  As our government continues to borrow and print more money, sooner or later big time inflation will rear its ugly head. At that point in time they won’t be able to print money fast enough to pay the debt, and I, for one, fear for our Country’s future.  Who is going to predict when we cross that line and are unable to pay our obligations? Personal bankruptcy is a tragedy; bankruptcy of the United States is a disaster.

As long as we continue to elect representatives (Democrat and Republican) that continue to spend money that they don’t have, in order to get themselves re-elected, we as a country are doomed to fail. When Bill Clinton was President we had a Republican Congress that somewhat got this, but when we additionally got a Republican President in power, everyone in government started spending like there was no tomorrow. Now with the Democrats running all branches of government, we are into hyper spending. Our present course is unsustainable, and I don’t see any solution, but somehow the yahoos in Washington need to get with the program and see the folly of their ways. The government is telling you that you can have your cake and eat it too … I think that they are all liars.
Posted by Texans for the Truth at 3/1/2011 11:04 AM
Categories: Politics
Tags: National Debt
 

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