National Debt: Pain for Years to Come?
Introduction
We’ve been hearing for years in government about this looming national debt figure, and there’s been enough debate about whether or not it is going to doom us all. These ‘budget hawks,’ or people who closely watch the national debt and oppose more borrowing, only were able to hypothesize what would happen. Now, a real problem is right in front of us, and we don’t need to make our theories.
The US Debt Clock Live Site (https://www.usdebtclock.org/) tracks live national debt, related economic metrics, and what the national debt is a cause of, as well as spending on certain sectors by the US government. Currently, we are at nearly 33.7 trillion dollars in debt, and this can include debt to different countries, and debt on our policies (including social security, medicare, and defense). However, our debt is so large that the fastest-growing category is interest on our debt itself. As our debt reaches 100000 dollars per citizen, it is clear we are in a dire state and will have less to invest in the future.
Implications
This debt underlines a major problem in the US economy — inflation. For the most part, economic growth happens best under very low but consistent rates of inflation. Having a larger debt means more money will be spent and printed by the US government, decreasing the relative value of the dollar in comparison to the dollar as it is right now and even other currencies. Apart from the impact on the dollar, there is a massive impact on us all, as the workforce.
High levels of debt will crowd our private investments in key resources and capital goods, which means workers and firms have less to work with. This leads to much lower productivity and output, and higher rates of unemployment. The major result would be a decline in median quality of life, as lower wages would not be enough to pay off bills and finance an average lifestyle.
If we continue on this path, there will be major turmoil in our economy and drastic policies that we will have to pass to prevent further economic turmoil. Instead of such sudden changes, we must start now and make sure our future is brighter through small steps today. Congress recently passed a bill suspending our debt ceiling until 2025, so let’s make sure we utilize this time well.
Usually, we only see such inflation and excessive government intervention in times of crisis, such as major conflicts or a crisis such as the Covid-19 pandemic. So why are we still seeing it now?
My Views
So what’s the real solution? Well, the issue of debt and spending by the government is very politically charged, and I’ll try to stay away from politics while outlining these views — however, they will inherently carry some political sway. Primarily, I think that US citizens have become dependent on welfare to a point where many are not even motivated to be productive since they know they will get bailed out by the US government’s excessive benefits. Of course, healthcare and social security is necessary to an extent, as those unable to work or who have retired need a way to self-sustain. However, this is a cycle where people are not making economically efficient decisions as they know they will receive enough money to cover several major expenses, and this leads to a decrease in productivity and a decrease in tax revenue which the government could be using to pay back their debt owed in the first place.
The way to solve this would be to gradually create better jobs in many sectors where growth is guaranteed, such as technology, STEM, and energy. These more technical jobs would lead to much higher incomes. Down the line, the government could then start reducing Medicaid support and certain welfare programs as there would be a decreased need for them.
Another way I think the debt could be reduced is through a comprehensive analysis of all government programs and agencies to determine which ones “soak up” the most money without providing necessary benefits, and cutting unnecessary programs. For example, many low-priority programs have become defunct in the last few decades and still need money to be accounted for.
Although these solutions might look great on paper, the economy of the US is very fragile and there is no blanket solution or any solution that would work without its fair share of obstacles. There are merely general ideas which I believe would help the current situation.
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