STAFF NEWS & ANALYSIS
At $21 TRILLION, the national debt is growing 36% faster than the US economy
By Simon Black - March 20, 2018

Via Sovereignman.com

Well, it happened again.

On Friday afternoon, the national debt of the United States hit another major milestone, soaring past $21 trillion for the first time ever.

Clearly that is an enormous number… it’s actually larger than the size of the entire US economy, which is pretty incredible.

But what’s always been the more important story about America’s pile of debt is how rapidly it’s growing.

For example, in the span of a SINGLE DAY, from Thursday to Friday, the national debt grew by $73 BILLION. In a day.

To put that number in context, $73 billion is larger than the size of most major companies like General Motors, Ford, and Southwest Airlines.

And in the month of February alone, the national debt grew by an astounding $215 billion.

$215 billion is larger than the GDP of New Zealand. Greece. Oregon. More than twice the size of the GDP of New Mexico. Just in a single month.

Most disturbingly, the national debt has grown by more than $1 TRILLION… just in the last SIX MONTHS.

I’m scratching my head right now wondering– where did they spend all that money? Was there a major economic crisis, wave of bank failures, or severe depression that required massive fiscal stimulus?

Nope. It was just business as usual.

Even better, the economy was supposedly doing totally awesome over the last six months.

And yet, even with all that positivity, the government still managed to rack up an extra trillion dollars in debt.

Amazing.

One important point to make is that debt growth is VASTLY outpacing GDP growth. And this is critical to understand.

Last year, for example, the US economy grew by 2.5% in ‘real’ terms, i.e. stripping out inflation.

Even if you include inflation in the calculation, the size of the US economy increased by 4.4%. Yet the national debt grew by 6%.

Now that might not seem like a big difference. But it is. On a proportional basis, the national debt expanded 36% faster than the US economy (even if you include inflation).

Over the course of several years, that effect compounds into something that’s quite nasty.

At the end of 2008, for example, the size of the US economy was $14.5 trillion. A decade later, the size of the economy is $19.7 trillion, 36% greater.

Yet over the past ten years, the national debt has grown from $9.4 trillion to over $21 trillion– a growth rate of 123%!

It’s really, really hard to pretend that this is good news.

But that doesn’t stop people from trying.

We’re constantly being told the same old nonsense that “the debt doesn’t matter” because we owe it to ourselves.

And, sure, it’s true that the US government owes a lot of this money to various institutions across America. Like Social Security. Or the US banking system. Or the Federal Reserve.

I find it difficult to see the good news here… as if it would somehow be beneficial to default on (and hence bankrupt) Social Security. Or the US banking system. Or the Federal Reserve.

Doing so would cause the most drastic financial cataclysm ever before seen in the United States.

So… yeah, the debt does matter.

Yet these major milestones are simply yawned off now, as if trillions of dollars in new debt is just par for the course. And that’s pretty sad.

Most people are in one of three camps when it comes to the debt.

#1: They ignore it altogether, and stick their heads in the sand (or up somewhere else).

#2: They acknowledge the debt, but tell themselves fairy tales that it doesn’t matter… or that the government is going to somehow ‘fix’ it. (which is ridiculous given that the government is the one causing the problem to begin with.)

#3: They view the situation rationally and understand that, maybe, just maybe, at some point in the future, there might possibly be some consequence to arise from the largest debt pile that has ever been accumulated in the history of the world… and they make sensible preparations just in case.

Which group are you in?


 

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  • Bolt Upright

    This can be wiped away by stamping 21 trillion dollar platinum coins.

  • littlebit43

    Thats only $63,000.00 for every man, woman, and child in the US. Send them a check. A family of four is only a quarter of a million.

  • Rothbard proposed a solution:
    Repudiating the National Debt

    mises(DOT)org/library/repudiating-national-debt
    mises.org/library/repudiating-national-debt

  • Joelg

    Excellent article. Missing Group #4: Some bad consequences to debt (which doubled under Obama-led National Socialist Warfare-Welfare State); but what is a person to do against USA.gov police state powers that can crush you like a bug for supporting insurgencies like Trump campaign? Look at poor USA Army General Flynn, he lost all his personal savings, had to sell his house and finally copped a “lying to the FBI” plea bargain to avoid gutter living while fighting Mueller Witch Hunt. USA.gov uses the debt to cultivate the resources to crush entire countries (e.g. Serbia, Libya, Iraq) and overthrow foreign governments (e.g. Ukraine, Iran, Central/South America, trying hard in Syria). When even a top USA Army general like Flynn does not have a fair chance against the superior resources (bought with debt) of the USA Police State run amok on steroids and armed to the teeth, complaining about the debt is like pissing in the wind. Ron Paul, the only candidate of the 21st century to understand economics, got run out of GOP convention by Romney forces in 2012. GOP Establishment and Totalitarian Democrats and their Deep State mandarins are out to crush Trump and punish his supporters, to prevent similar challenges and allow debt doubling to be a permanent feature. Then with the Dictatorship of the Elite in the USA Complete and Total, the currency can simply be devalued 50%. Argentina famously had its old and new pesos, and so there will be the old (worthless) and new dollars (worth 10-1,000 old dollars). So, doubling debt is not a problem for USA.gov. Currency devaluation can be dramatic if the Fed’s gradual inflation policy continues to fail (as is likely). What me worry? Dennis & Rothbard got it right.

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