This is a national debt clock. It's been in York since the late 80s,
and it shows a gross national debt that we as a nation owe countries,
companies and people that lent us money
almost exclusively in the form of bonds. Back in 1989,
it was just shy of $3 trillion. Today, it's north of $30 trillion. And if you look at it by household,
there's a reality check, more than $300,000 owed per household. many worry that a confluence of factors,
is going to send the US into a debt spiral. The US routinely is spending more than the country
and the government is taking in. So we are living beyond our means
By the end of this decade, the U.S. is set to spend more each year
paying interest on international debt than it will on national defense. And that's not
because military spending is decreasing. The reason is because servicing
that debt has become so expensive. As it stands today, the US
Treasury Department spends $1.8 billion to pay the interest
on our existing debt. By 2033,
that number will be closer to $4 billion. the money that we pay every single day
to finance our deficit cannot be spent on roads, bridges or infrastructure
or our children's future. It is just being spent
to finance our deficit. So how did the U.S. get here? For two decades after the clock first appeared, the national debt
was considered manageable. But that all changed
in the wake of the 2008 financial crisis. When two things happened, the U.S. economy shrank and borrowing increased. our economy plunged
and we had a lot of deficit spending to try to revive it. that's when the current trajectory
really grabbed a hold of the country. by 2013, the continued slow growth,
even though it had picked up and the rising debt
put it above 100% for the first time ever. So our debt was above
the size of our economy. This comparison is known as the debt
to GDP ratio, and it's often used by economists
to gauge the fiscal health of a nation. Even though that was a high level,
it pretty much stayed flat for about a decade. That is until everything changed Covid happened and our borrowing catapulted higher sending checks
to businesses and consumers. The Fed did their part,
cutting interest rates to near zero. while that was helpful,
that ended up sparking spike in inflation that eventually led to higher interest
rates as the Fed had to pivot to combat
inflation. Shutdown. Shutdown. Shutdown
The Democrats have never wanted to stop the amount of spending How do you explain
to taxpayers that makes any sense? Every year,
Washington plays political football, avoiding the hard decisions
to balance the budget. an 11th hour compromise
always saves the day, but it also kick the can down the road because
the underlying problem isn't fixed. This hasn't escaped the eyes of our U.S. credit rating agencies. Fitch recently downgraded the US credit
rating by one notch, taking it off triple-A,
it was a historic decision based on a lot of wrangling
in Congress over our deficit. And it also had a lot to do
with some of the political instability that the world has seen coming
from Washington, Fitch predicted that by 2025,
the debt to GDP ratio will be 118%. And that number is three times
the average of other similar countries. They're basically saying,
Washington, you are still on notice But here's the thing. There are real life solutions for the US
to reach a healthy debt equilibrium. But as you can imagine,
none of them are easy. One is, if the economy simply grew
stronger, we're currently growing, but not that much, So that may be
highly unlikely to be the answer. number two is that if in Washington
they could agree on spending cuts, We would have to see cuts in health
care, Medicare, military spending. number three
is if we could increase taxes. Something else that politicians don't
like to do, especially in election years. Rapid growth,
spending cuts and increased taxes were all elements of the Clinton
administration's balanced budget, which at the time was projected
to pay off the national debt by 2012 but the role that government
played through the great financial crisis and the pandemic has changed the country's
economic landscape dramatically. Democrats and Republicans alike have used
the public purse to stave off catastrophe and revive growth. Neither has made attempts
to cut the deficit. It's really easy for Republicans
to blame Democrats or Democrats to blame Republicans for the problems
that we currently have in our trajectory Both parties have made decisions
that have led to the immense deficits
that we have right now. as terrifying as the current debt trap is. What's more scary is that politicians in
Washington are using it as a cudgel. we don't see enough moderates who are
willing to reach across the aisle rather. Parties are being pushed
to opposite ends of the political spectrum so that it's going to be get harder
and harder to find ways to face our poor fiscal management.
