On the day in 2011 when the gross national debt crossed $14 trillion Bill O'Reilly emphatically proclaimed on the O'Reilly Factor on FNC that we had reached our borrowing limit. The USA could go no deeper into debt in this pundit's opinion without serious widespread bad effects to our country. Well the national debt was over $36 trillion @ the end of 2024.
Since the debt has almost tripled since Bill's cataclysmic statement people have given up making statements like Bill did in 2011 but are satisfied to just say that the debt is unsustainable or that our children & grandchildren will pay this debt off. Most older Americans are happy to leave it @ that because the equation does not include them - just their children & grandchildren who they reason can fend for themselves when the time comes.
But the most interesting way pundits have been thinking about this large debt number lately is to find different examples that show its enormity to impress the general population who live in oblivion & couldn't care less.
The simplest of these examples is to recommend that people write out the entire debt number showing all 12 zeros - $36,000,000,000,000.
Or, you could ask how long it would take to spend a trillion dollars if you spent a million dollars per day. Please let me know - I'd be interested to see what you get.
Still, another way to illustrate the huge debt is to ask how high a stack of one trillion dollar bills would reach (using the standard that a stack of 100 bills = 1.09 cm high). Relating the answer to the distance to the moon makes the point. And that's just for 1,000,000,000,000 bills not 36,000,000,000,000.
The problem with all of these examples, as entertaining as they are, is that they don't help us understand that the gross national debt predicament is not just a large dollar number - which should be obvious after all the years of deficit spending with no apparent ill effects to the country.
The January 21, 2021 post entitled The Significance Of The National Debt explains that the debt crisis will come when the Treasury can't find a buyer for our debt - & this was well on its way to happening on April 9 only hours after Trump's reciprocal tariffs on nearly 100 countries had taken effect. The DJIA had dropped over 4,500 points from April 3 to April 8 after Trump announced his reciprocal tariffs on April 2. This precipitous drop over 4 days totaled over 11% for the DJIA, over 12% for the S&P 500, & over 13% for the Nasdaq Composite.
In the past such times of stock market stress caused investors to rush in a herd-like movement to the United States Treasury bond market. But not this time - Treasuries fell just as precipitously as stocks with the 10-year Treasury note yield rising from 4.01% on April 4 to 4.48% on April 11 meaning investors demanded higher yields to buy our debt. A bad sign.
The reciprocal tariffs caused the damage & Trump blinked, pausing them for ninety days, except for tariffs on China, after he realized that foreign buying of our debt was drying up thereby beginning the end of America's deficit spending party.
Now by all means do the above calculations & write out all the zeros when expressing the national debt to see if it helps you get a feel for its enormity. But also to help get a handle on the individual burden of the debt, divide $36,000,000,000,000 by 335,000,000 United States citizens to see the equal share of every man, woman, & child in the citizenry. This is the measure to be concerned with if Trump reinstates the reciprocal tariffs after the ninety day pause ends.
No comments:
Post a Comment