By Chris Talgo
This week, the American national debt exceeded the fairly significant amount of $ 37 billions. For the context, the American national debt reached 34 dollars billions in January 2024, exceeded 35 billions of dollars at the end of July and overshadowed 36 billions of dollars in late November.
Obviously, the national debt is on an unbearable trajectory. More obviously, if we are not starting to remedy it now, it will only get worse.
Even if the United States had to maintain the expenditure status quo, that would not do enough to put the nation in a healthy economic position.
The problem is the annual cost of the service of interest on the existing debt. This year, the United States will land well north of $ 1 billion in net payments on national debt.
Again, a little context: this number is greater than the full budget of the Ministry of Defense. In fact, in terms of line articles in the budget, the payment of annual interests on national debt is now in third place, slightly behind social security and medicare / medicaid.
As anyone who has already had a high interest loan or a credit card, this is the interest in the main duty that it is the killer. Currently, the principal of 37 billions of dollars owed by the American people, mainly for us and some to other nations, becomes a bullet and a chain on the economy.
The reluctance of the federal reserve to reduce interest rates does not help things. But even if the federal reserve was to write interest rates to Zero, which is probably a very bad idea, that would only make rooms.
The elephant in the room is the swollen budget of the federal government. This year, the federal government will spend more than $ 7 billions for the first time, another dubious record. Meanwhile, this will cause a deficit of more than 2 billions of dollars.
A large part of these financial problems dates back decades, but the things really hit the fan during and after the pandemic.
In 2019, the federal government spent around $ 4.4 billions. A monumental figure, no less, but even not almost 7 dollars billions this year.
During the pandemic, the government put spending on the turbochang. Although it may have been justified at the very beginning, when pure panic was the norm, it continued long after the initial trauma.
In fact, it is essentially to date. Although the stimulation controls have stopped flowing, the enormous increase in expenses accelerated in the large scheme.
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Part of the problem is that once temporary government programs or emergency measures are put in place, they have a strong tendency to stay in place. After all, it is in the personal interest of those who work for these agencies to engage in self-service at all costs.
Ronald Reagan was right: “No government is voluntarily reduced in size. Government programs, once launched, never disappear. In fact, a government office is the closest to eternal life that we will never see on this earth!”
As such, the only solution to the dilemma in which we are stuck is to reduce federal spending.
It is not our fault, necessarily that folding politicians stupidly spent our money. This is normal for the course. The real problem is when people become apathetic and go to the mermaid calls for more government generosity.
The indifference among people allows those who seek to spend the money from others.
Fortunately, we still have time to turn the trend.
During his second term, President Trump prioritizes the reduction in expenses like no president from Calvin Coolidge. Trump seeks to dismantle whole departments, reduce federal bureaucracy and end waste, fraud and creeping abuses.
Of course, Trump is off to a good start. Although the reconciliation bill was not perfect, it eliminated a lot of bad spending. Although some say that this will add to the deficit, it is also more than likely to increase economic growth, which is another key element to straighten the ship.
In addition, the fact that Trump created the government’s Ministry of Efficiency, which highlighted some of the most scandalous cases of waste, fraud and the most scandalous, made people more aware of the situation.
This summer, Trump has signed a recurrence package that recovered spending on the back, but up to around $ 9 billion.
As sad as it may seem, it’s a good start. Make no mistake, we still have a very long road to come. But the fact is that we can reduce expenses. We can reduce the federal government. We can make short -term sacrifices to make sure that the American dream remains in the long term.
Chris Talgo ([email protected])) is editorial director at the Heartland Institute.
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