Spiralling National Debt!
The U.S. Treasury Department reports Gross National Debt exceeded $30 trillion, while Americans dealt with the economic consequences of the pandemic. The National Debt impacts ordinary citizens as the government retains existing benefits and services without enhancing national debt/ budget deficits, by raising tax revenues or reducing expenditure. Governments choose to reduce spending on social safety nets, infrastructure, first responders, and education programs which directly impact daily lives of people. What constitutes the national debt and factors responsible for making it rise and how it impacts our life, is explained below:
Explaining the National Debt
The national debt represents exactly how much the US government owes its lenders. When the government’s spending is more than the revenues gathered every year, it will create an imbalance which is the budget deficit. The government then borrows money to cover expenses. Every government runs a deficit, regardless of which party stays in power for 77 of the past 90 years since debt was carried after the Revolutionary War in 1790. While the budget trends remain unsustainable in the long run, nothing indicates current debt levels are worrisome. Federal public debt rose from $14.6 trillion in 2017 to over $21 trillion in 2020.
Public debt and intra-governmental debt is the amount of money thee US still owes to outside debtors such as investors, US banks and businesses, individuals, state and local governments, Federal Reserve and foreign governments and international investors like Japan and China. The money raises funds needed to maintain USA operations and includes Treasury bills, notes, and bonds. The national debt continues to grow and is used as a bargaining chip when raising the annual debt ceiling.
Responsibility for Rising National Debt
Regardless of political affiliation , all political parties contribute to budgetary deficits through higher expenditure and lower revenue collection. While some administrations enhanced federal deficits and national debt, only Congress authorizes the legislative impact on expenditure. Franklin D. Roosevelt weathered an abundance of economic crises with the Great Depression and economic recovery package together helped lift America’s economy immensely, and the cost of World War II forced Congress to add $236 billion to national debt during FDR’s terms. Ronald Reagan’s two terms, had Congress enacted two historically significant tax cuts that lessened government revenue and increased national debt from $924.6 billion to $2.19 trillion. Barack Obama’s two terms, the mortgage market collapse and the ensuing recovery put in $8.6 trillion into the national debt during Obama’s term. Donald Trump slashed corporate and personal income tax rates for the wealthy, increasing federal deficit by $1.9 trillion. The tax cuts and various Covid relief packages were also responsible for the Debt increase.
National Debt Mitigation Efforts
Some actions can mitigate national debt effects:
Pay taxes:
IRS confirms that the federal government loses $1 trillion annually to unpaid taxes.
Pressurise Congressional reps:
Call/write to your Representatives and Senators to support tax code reforms, increase IRS funding to uncover tax cheats and plug tax loopholes
Review Representatives’ voting history:
Review how Representatives and Senators voted on fiscal policy issues, as it’s easy to verify. Use voting history to raise concerns with your reps.
Understand healthcare reforms:
National healthcare is controversial but other countries control healthcare costs with policy reforms to benefit citizens as rising healthcare costs impacts national debt.