The national debt is simply the amount of borrowing undertaken by the federal government. It’s the debt of the country and is usually referred to as a percentage of gross domestic product (GDP); the higher the national debt in reference to the GDP, the riskier the country’s financial state is to shocks to the economy. The amount of the current national debt is approximately $17.89 trillion, or about $56,052 per American as of November 2014. The national debt gets bigger when the government accumulates a deficit, which is then added to the national debt balance. The government raises funds via the debt market when there is a shortfall between spending and income. Debt exists in the form of government bonds and bills.
The problem at this time is that the federal government continues to run annual deficits. The amount of the national debt has already surpassed the legal limit and has had to be increased on numerous occasions over the past few years. The issue at hand is the government will need to address the rising debt as it has already impacted budgetary spending and has resulted in fiscal spending cuts across the board, which impacts Americans whether it is on social programs or government services. If left unabated, the debt will continue to grow towards $18.0 trillion. The concern is that as interest rates rise, the interest carrying costs will surge and make the national debt situation even worse.
According to the Congressional Budget Office (CBO), the U.S. budget deficit will grow from three percent of gross domestic product (GDP) today to six percent of GDP by 2040. (Source: Congressional Budget Office, June 16, 2015.)With the CBO expecting GDP in 2040 to be $31.4 trillion, six percent of that number would equate to a budget. Read More
The U.S. national debt currently stands at a staggeringly high level. Sadly, it’s only expected to go higher—and at a much quicker rate than the government predicts.U.S. National Debt to Hit $19.0 Trillion This Year? According to the estimates by the Congressional Budget Office (CBO) for the fiscal 2015 year that began in October. Read More
With the U.S. government forecast to incur budget deficits year-over-year through to 2025, our rising national debt is turning into a debt crisis that will have long-term negative effects on our economy and currency valuation. In particular, two ticking debt time bombs are lurking nearby.Official National Debt Figures to 2025According. Read More