On March 1, the national debt of the United States exceeded $ 28 trillion. What is the national debt?
That’s all our government owes the public – think about bonds and borrowed money – and all the government owes itself – think about Social Security and Medicare obligations. This is $ 22 trillion in publicly held debt and $ 22 trillion in so-called “intragovernment” debt – the government owes it to citizens through rights programs.
The highly respected and non-partisan Peter G. Peterson Foundation explains the national debt crisis as follows:
Our national debt of $ 28 trillion is larger than the economies of China, Japan, Germany and India combined. It is $ 218,000 per American household or $ 85,000 for each American. If every American household paid $ 1,000 a month for debt, it would take 18 years to pay it off. Currently, Americans pay $ 800 million in interest a day on the national debt.
With yet another massive COVID-19 relief stimulus package in place on Capitol Hill, some financial analysts are predicting unprecedented further growth in national debt on the nation’s horizon. But that was after former Republican President Donald Trump increased the national debt by $ 7.8 trillion under his watch.
As has been the case for years, social security and health insurance rights as they exist today are in dire straits and financially unsustainable under current law, while 78 million baby boomers like me are rushing into retirement.
The two largest segments of mandatory federal spending are actually Social Security and Medicare, estimated at $ 2,966 billion in fiscal 2021. That’s nearly 60% of all federal spending, according to the government. Congressional Budget Office and the White House.
So, as a nation, the US economy has not experienced debt and deficit at these levels since the end of World War II. But with the federal government able to issue 30-year bonds at interest rates of 1.4 to 1.5 percent, the cost of additional government borrowing – even for $ 2 trillion – is a staggering one. viewpoint adjusted for negative inflation (gulp!).
But multiple COVID-19-inspired stimulus packages, which far surpassed Obama-era Great Recession stimulus packages, have exacerbated debt and deficit problems, and heightened the urgency of finding solutions. health insurance and social security solutions as early as possible.
Before the country’s debt and deficits increased during and supposedly after COVID-19, Social Security was only supposed to be solvent until 2035 – 14 years into the future. Have the impacts of COVID-19 on the economy and the necessary stimulus spending accelerated this timeline? Medicare is likely to be on a shorter fuse, say 2026, according to most experts.
Additionally, there are predictions that COVID-19 may well impact the fiscal health of both rights programs. But other voices are calling for a calmer and more rational approach.
Philadelphia Inquirer medical writer Stacey Burling wrote in February: “Over the past year, COVID-19 has been particularly devastating for those past retirement age. As of mid-February, those 65 and over accounted for 81% of pandemic deaths in the United States. More than 373,000 elderly people have succumbed to the new virus, according to the United States Centers for Disease Control and Prevention.
“As frightening as it sounds, Paul Van de Water, senior researcher at the Center on Budget and Policy Priorities, expects Congress to salvage these crucial programs before they are forced to reduce the benefits of key voters.
“The truth is, Congress has never allowed and will never allow these programs to run out of money,” he said. “No one should lose a moment’s sleep as the pandemic and recession will cut off their Medicare and Social Security benefits. “
But the national debt? It is worth worrying about.
Sid Salter of Starkville is a union columnist. Contact him at [email protected].