US National Debt Blasts Past $17 Trillion
October 21st, 2013
After politicians scrambled to raise the nation’s borrowing limit, the national debt shot up $327 billion in one night. Politicians wailed and moaned that failing to raise the federal debt ceiling would cause the US to default on interest payments on the national debt, despite the fact that the government takes in sufficient revenue to cover the $20 billion or so a month owed to creditors. However, during the debate over the debt ceiling vote, few elected officials pointed out the real crisis facing America — a crushing national debt that is currently exploding to unimaginable levels.
Last Friday, the national debt vaulted above the $17 trillion mark. Meanwhile, Karen Hudes, a former lawyer for the World Bank, that the dollar is at risk of crashing soon. Also, JPMorgan Chase recently indicated that it will no longer issue new student loans, which caused CNBC to declare that the student loan bubble is starting to burst. While politicians pat themselves on the back for raising the debt ceiling, claiming they’ve averted a crisis, it appears America’s fiscal nightmare is actually just beginning to unravel.
17 Trillion: A National Embarrassment
Politicians in Washington DC have no interest in cutting spending. Even as the nation teeters on the brink of a debt crisis, elected officials keep adding new programs. The War in Afghanistan continues along at great expense to taxpayers with no clear mission. Though the President (falsely) claimed that the US doesn’t have enough incoming revenue to cover existing interest payments on the national debt, his administration was pushing for an expensive new war in Syria as recently as the month prior.
So far, the only effort to “cut spending” that has been employed by the Congress is the sequester compromise that was agreed upon during a previous year’s debt ceiling vote, which merely cuts from proposed increases. Ultimately, no steps whatsoever have been taken to deal with the exploding national debt, despite the fact that the 2010 congressional election results were widely seen as a voter mandate to trim back on government spending.
The US Economy Sits at the Brink of Disaster
The Federal Reserve’s quantitative easing program has to be unwound at some point via tapering, which will cause interest rates to rise. If it does not, massive levels of inflation will suffocate America’s economy. To make matters worse, the student loan bubble looks like it is about to pop, and economists are warning that the Fed’s QE policies may be stimulating a global housing crisis.
Though politicians believe that the debt ceiling vote has averted a US credit downgrade, the reality is that a downgrade will likely happen anyway in time, as the core issues affecting the nation’s creditworthiness haven’t been addressed. Ultimately, the recent budget battle wasn’t resolved at all, as politicians simply kicked the can further down the road. America faces a tough journey ahead, fiscally speaking, that may end in an unprecedented global financial crisis, worse than any the world has ever known.
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