Debt Is Crippling Our Nation
The United States federal government has an accumulated debt of more than $17 trillion, and that debt is expected to grow significantly in coming years. This burden is an extremely serious drag on our economy. Borrowing more and more money will threaten the livelihoods of Americans, as well as our standing with the rest of the world. It is important we act now, so we can set our nation on a new course.
Due to failed policies, the federal government has to borrow money when the revenue it collects is not enough to cover the amount it spends. This is our federal budget deficit. The government’s current largest expenditures are defense, health care and Social Security.
A system nearly in balance has been wrecked by both parties. Reforming our tax system and reducing the costs of those programs are critical to creating a deficit-free budget.
Like with a credit card, carrying a balance on loans is not free. Our government now spends about $200 billion every year just on interest payments, and we get nothing for it. Half of this money goes overseas to foreign countries that own our debt. These are the same countries who are our economic competitors. Future unpaid liabilities for the federal government are now estimated to be between $50 to $70 trillion.
The Federal debt isn’t the only concern. As high-paying manufacturing jobs have left our shores, more workers have turned to college degrees to advance their monetary futures, causing them to go into significant debt in order to earn degrees.
Undergrad borrowers who graduated in 2012 owed an average of $29,400. This is up from $18,750 less than a decade before in 2004. Americans now owe over $1 trillion in student debt and nearly 12 percent of all student debt was delinquent by the end of the third quarter of last year, up from 7.6 percent five years earlier.
If there were jobs for recent graduates in their fields this wouldn’t be as much of a concern. The underemployment rate for recent graduates is also higher than in the previous two decades, at 44%.
Another result of “free trade” has been consumer debt. Consumer spending now makes up nearly 70% of our economy. As companies press for higher profits, they have turned to credit cards to ensure their profits remain high. The typical household now has an average of over $7,000 in credit card debt. The U.S. has over $854 billion dollars in credit card debt. Retail credit cards average a yearly interest rate of 23 percent and can be as high as 28 percent.
Similar to credit card usage, home sales fell so companies pushed people to apply for mortgages, even to the point of handing out loans to people who had no business owning a home. The total mortgage debt now adds up to over $8 trillion. Almost 10 million homes are considered underwater, meaning the owner owes more than the house is worth.
Due to “free trade,” failed budgeting policies and consumer debt, the U.S. is facing a significant debt crisis. If we combine all debt in the U.S. together including consumer, government and business, the U.S. owes approximately $60 trillion in debt. We must do something to fix our nation’s reliance on debt.