-Oh the National Debt!-

Article: Putting U.S. debt in perspective

Author: Steve Hargreaves

Date of article: October 7, 2013

Website: CNN Money

                As an educated U.S. citizen, I am aware, and almost constantly reminded of, the country’s gigantic national debt.  I chose this article to better understand this debt, in perspective to other countries and the U.S itself. The struggle right now in Congress and the government shutdown basically centers on this elephant in the room, the national debt. The conflict arises as this number begins to climb higher and higher every year and the disagreement lies in whether to raise the debt limit or pay off our debt by adding taxes and such.

                So let’s add some real numbers to this problem; the U.S. debt right now is $16.7 trillion. That’s about $52,681 per person. Now let’s backtrack; in 2003, the national debt rounded off at $4.04 trillion. The national debt quadrupled in ten years. If that doesn’t scary you enough, national debt is predicted to reach $50 trillion by 2030. I wondered how this number got so high so I researched the national debt history year by year and I found that the nation’s debt soars during battles and wars. During the Civil War and World War I national debt was 25% of GDP and it skyrocketed to 112.7% during World War II. Since the economy was in such awful shape, the great depression, the need for borrowed money is quite understandable. So let’s apply this to our economy today; our constant participation in overseas wars and conflicts is one of our biggest expenses. If this was reduced, or better yet, eradicated completely, our debt would drastically shrink.

                Knowing the important details of the situation, now we can take a look at the article which basically puts all these details in perspective. Although the U.S. national debt looks daunting, it’s not as awful as its other worldly powers. Take Japan for example, with a national debt of 238% of GDP, which looks terrible compared to the U.S’s 103%. Even developing countries, like India and Brazil, both in the high sixties percentile, have a hefty national debt.

                These comparisons might prove comforting to some people but not for long. The article goes on to say “the average U.S. household is in worse shape than the government.” The debt-to-income ratio in U.S. households is 137%, more than 30% higher than the national, with household incomes ranging from 51k to 70k. This is very bad news. These numbers prove fetal to us and our economy. If the people of this country are in more debt than the country itself, which isn’t in great shape anyway, the country will fall fast. If the people can’t handle their own debt, the country is not any better off than its people.