The United States national debt is the quiet crisis affecting our nation. Very little attention is paid to the issue on a day to day basis, lip service is provided to it by either political party only when they are in the opposition party and unable to press forward with their own unfunded priorities. Here is a handy website that shows a real time calculation of various debt and spending tallies:
We are approaching $28 Trillion dollars in national debt. Over $83,000 per U.S. citizen, over $220,000 per U.S. taxpayer. These are staggering numbers and kicking the can down the road as we have been ever since the end of WWII is going to destroy our way of life at some point, yet no one seems to care. In 1980 the national GDP to debt ratio was 34.72%. This means that our debt held by foreign and domestic interests was at 34.72% of our GDP. A decade plus of SDI debt, military funding general increases, tax cuts (particularly huge tax cuts to capital gains taxes), and military conflict spending brought that number up to 55.06% of GDP by 2000.
In the subsequent two decades, we have inflated our debt to outrageous levels by continuing tax cuts, increasing military and other non-discretionary spending, continuous wartime spending, and economic relief packages through three presidencies. Now, we have a 128.92% debt to GDP ratio.
To put that in context, if you make the average wage of a U.S. worker, you make just under $36,000 a year. That is a very moderate wage in most of the United States. Imagine making $36,000 a year, using your income to pay for all your basic costs of living while raising a family, while also trying to pay off credit card debt in the amount of over $46,000. With that low a salary, if you paid down $500 a month on that debt, with a currently moderate credit card interest rate of 8%, it would take 20% of your before tax income and take you more than 12 years to pay off, assuming you never put another penny on your card.
But for our national debt, we almost entirely pay nothing but interest (about $350 billion a year, or 10% of our tax revenue), so we are lining the pockets of foreign and domestic interests with no risk while never paying off a dime. This is on current 10 year notes that have near 0% interest rates. But what happens when the economy turns around (to be an optimist) and interest rates approach at least historic low numbers (think fed rate of 4-8%)?
Suddenly we are going to be forced to either significantly raise taxes in order to keep barely "getting by" on interest only payments, or we will have to spend increasing percentages of our tax revenue on paying interest, think 30-50% depending on interest rates.