Inflation is at its worst level in half a century in this country. There’s not even enough baby formula on the shelves and the price of gas is through the roof.
Americans have every right to be worried about the state of our economy and their own financial future. If inflation keeps spinning out of control, none of us are going to have the money to afford necessities.
Yet, under the surface, an even bigger financial threat is looming to our own stability and the future of our financial and economic system.
The National Debt is Accelerating
Under COVID, our federal government shelled out almost $5 trillion dollars in relief. This, along with the $1.9 trillion pumped into Biden’s “Rescue Plan,” definitely contributed to inflation.
Even more so, it added to our massive national debt, causing us to have to pay more interest as a country on the money we already owe.
We are paying high interest on the money we owe because the stability of the world’s financial system depends on paying a price for taking out loans.
Governments pay that price, just like individuals do. When you continually spend money you don’t have, the result is much higher interest payments.
From 2011 to 2018, we paid out an average of over $270 billion per year on national debt in interest charges. However, from 2019 to last year, we paid out an average of $389 billion per year in interest charges on the national debt.
That’s close to a 50 percent increase. If we keep spending at this level under Republican and Democrat presidents, we’re going to reach average yearly payouts of $940 billion per year in debt on the national interest.
That’s completely unsustainable and leading us off a fiscal cliff.
Our national debt is so high that we can no longer even pretend that we will
repay it one day. It's a $30-trillion monument to our improvidence and
refusal to confront reality. Our "entertainment" is sadistic, nihilistic
and as enduring as a candy bar wrapper thrown in the trash
— Capt John the Deplorable (@CDeplorable) May 25, 2022
The Federal Reserve is finally raising interest rates slightly and we’re now at 2.8 percent.
If it jacks rates even one percent above what they would be, we’ll be paying out over $30 trillion in interest in the debt. This is 70 percent of all the money the government collects from taxes.
In other words, this nation and its citizens will become literal slaves to pay off debt that can never be paid off if we continue on the trajectory we’re on.
If rates are raised by two percent, all the money the IRS takes in taxes would go directly into paying off interest on debt.
Yet, Biden continues to spend like a drunken sailor. The man who should be watching out for the future health of this country has no problem tossing out millions in every direction in the 2022 budget.
He’s OK with wasting money left, right, and center.
This country has lost its financial mind. Spending under President Trump was also extremely out of control. The only difference is at least Trump was seeing economic growth, low prices, and a surging economy to hopefully offset the spending.
Biden doesn’t have that luxury; he has just the opposite.
— Peterson Foundation (@pgpfoundation) May 26, 2022
The Bottom Line
We need to slow down spending if we want to ever begin to tackle this debt for real.