National Debt & Personal Consequences

Our national debt is now over $13 trillion.

How big is a trillion? Think of it this way: one million seconds will pass in the next twelve days; One trillion seconds will take over 30,000 years to pass us by.

Congress has accumulated this $13 trillion debt by consistently spending more money than we receive in taxes. In 2009 our government brought in $2.1 trillion in taxes. We spent $3.5 trillion. That means we borrowed $1.4 trillion to make up the difference.

We owe these enormous sums of money to lenders in the US and abroad, including countries like China, Russia and Saudi Arabia — countries that may not have our best interests in mind.

Accumulating this much debt won’t just mean that the accountants at the Treasury Department will have to purchase bigger calculators. There are serious personal consequences for you and your family.

• More Debt Means Higher Taxes: The US is borrowing one million dollars every 30 seconds. This year, we’ll pay over $200 billion in interest on our debt; that figure will rise above $900 billion in the next ten years. Our monthly payments on our outstanding debt will grow much larger, and we’ll need more money to make those payments.Today, all our tax revenue is already committed to entitlement spending spending (e.g. Medicare and Social Security) and interest on the debt. Money for defense, education, transportation, national parks and most other government services is borrowed. Some have suggested that higher taxes on the rich are the solution to the debt crisis. Learn why higher taxes can’t defeat our debt.
• More Debt Means Higher Interest Rates: If we continue to accumulate debt, those who lend us money—both American investors, as well as foreign countries—will demand higher interest rates to compensate for the greater risk of loaning money to the US. Our country’s high debt load could cause this to happen suddenly, with little warning. (pdf) Interest rates on Treasury bonds affect the rates charged for home mortgages, student loans, car loans, and even credit card balances. What would you do if the monthly payment on your home mortgage jumped from $1,100 a month to over $1,400 to cover higher interest payments? That is an additional $3,600 a year for interest alone. Learn more about interest rates and pricey mortgages.
• More Debt Means Fewer Jobs: Research indicates that a country’s economic growth slows when the government accumulates too much debt. If the economy is growing more slowly, it means fewer goods and services are being produced, and fewer jobs are needed to produce them. In 2010, it is expected that the United States’ debt level will reach the historical average that slows job creation.
• More Debt Can Erode Your Life Savings: One refuge for seriously indebted countries is to print money to pay off debt. This “inflation solution” devalues wealth and savings.Consider: In Argentina, where the government decided to print money to pay its debt, the eventual inflation was so great that 100 billion Argentine pesos in 1975 were worth 1 peso in 1992. If the same thing happened in America, Bill Gates’ fortune of $60 billion would be worth 60 cents! Each new printed dollar makes existing dollars worth less. Learn about a more recent example.
• More Debt Makes Your Family Less Secure: For the first time, an influential government military report included the growing national debt as a threat to our country, alongside other problems like nuclear proliferation and terrorism. The report points to debt crises that have hobbled other powerful countries, and says that current spending trends could put the US in a similar situation.Both Secretary of State Hillary Clinton and Admiral Mike Mullen (the Chairman of the Joint Chiefs of Staff) have called the debt a serious threat to national security.If funding for national security becomes a casualty of our growing debt, the consequences for all of us are a country that’s less secure.

Read the original story at Defeat the Debt