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The National Debt Hit $22 Trillion at the End of 2018

Growth alone won't get us out of this mess.

|||Alexlmx/Dreamstime.comAlexlmx/Dreamstime.comLike many politicians before him, President Donald Trump promised to address the national debt. In fact, Trump told The Washington Post reporters in 2016 that he planned on eliminating the then $19 trillion debt in just eight years—the length of his presidency should he serve a second term. While his promise was always rather aggressively optimistic, a new report indicates that the American debt is steadily moving...in the wrong direction.

A report from the Treasury Department shows that 2018 ended with the national debt standing at $21.974 trillion. This means that $2 trillion in debt has accumulated since Trump's promise to eliminate it completely.

The debt consists of $16 trillion in public debt, or what the American government owes to domestic and foreign investors, and $5.8 trillion in intra-governmental debt, which is what is the American owes to public accounts like Social Security. If those numbers aren't terrifying enough, Reason columnist Veronique de Rugy explains, the national debt has more than doubled since George W. Bush's presidency in 2009. To give some perspective, in "the last 10 years, the federal government has accumulated more debt than in its entire existence leading up to that period."

Trump is not solely to blame for this problem. Though he previously rallied voters over entitlement reform, former House Speaker Paul Ryan failed to make any meaningful changes while the Republican Party controlled Congress, and long-term structural problems plague the whole endeavor.

The impending debt crisis cannot simply be solved by economic growth either. In an interview Brian Riedl, a senior fellow at the Manhattan Institute, Riedl told Reason's Eric Boehm that America essentially has two options left: "Either significantly raise taxes on the middle class or significantly cut benefits to current seniors. If we do neither, you will have a major financial crisis."

Photo Credit: Alexlmx/Dreamstime.com

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  • Fist of Etiquette||

    "Either significantly raise taxes on the middle class or significantly cut benefits to current seniors. If we do neither, you will have a major financial crisis."

    Well, I'm certainly not voting for this guy. I'll tell you that much right now.

  • gaoxiaen||

    Don'y worry. We'll never run out of zeroes.

  • Unicorn Abattoir||

    Have no fear everybody, I've got this covered!

    /searches sofa for spare change

  • Pro Libertate||

    Not sure I agree. We could grow out of this disaster by cutting overall spending over five years or so, which would probably give us enough to cover debt service and to begin running a sound budget.

    The problem is that no one much wants to do that.

  • Get To Da Chippah||

    Everyone's fine with oxen being gored as long as it isn't their ox.

  • JesseAz||

    Just ending baseline budgeting assumptions would go a long way to reducing the deficit.

  • JFree||

    No we can't grow our way out anymore.

    The debt is too large relative to annual GDP (and structured mostly short-term because that's the way our current lenders want it). That means even if we do grow, interest rate increases will rapidly BECOME govt spending and will strangle growth. That's where Japan is now - and historically is called selling your children into debt slavery. Absent a revolution/war for the purpose of debt repudiation, that sort of strangled stagnation can stay in place for generations. This is actually the economics behind the Biblical jubilee - two different cycles (one of 7 years and one of 50) where existing debt is repudiated, assets are re-pooled among the living, jubilee is declared, and everyone reverts to a pure non-asset non-debt based economy for a year. Unfortunately, that jubilee only happened a few times for a lot of reasons and it is the only example in history that doesn't end in violence.

    If we tackle spending directly, the spending reductions will hit the only parts of our economy that have been growing for the last couple decades - healthcare, housing-price based spending, education, and finance. Which is fine in theory (those sectors really need a very harsh long-term recession in order to productively reallocate bad decisions) but there is no reason beyond mere hope to believe that some other sectors will grow to offset that shrinkage.

  • JeffreyL||

    Remind me again what currency the debt is issued in? Also, remind me again what Article I, section 8 subsection 5 states?

    Congress could pass a law tomorrow and the president could sign that law and the debt would be paid in full with US dollars printed by the US mint.

    The amount of the debt the is not the issue, just ask Japan. What is the issue and is always the issue, is what is the rate of inflation. Right now, that is quite low. I will worry when that is no longer the case.

  • Mcgoo95||

    I believe you are correct. I am always wondering exactly what cliff we are inevitably going to run off with such a massive debt. I rarely find articles that go any deeper than "look how huge our debt it, it must be bad". For normal people, debt means somebody comes looking for you and there are consequences. Not sure this is true for our government. I would really like someone to explain, in terms I can understand (never really studied economics), how this catastrophe might unfold. I get printing money causes inflation but how and why will the national debt come due?

  • Jerryskids||

    The problem with debt isn't just that people come looking for you, it's that lenders become wary of lending you more money. Right now the US dollar is "good as gold" (not really) so it's the international exchange currency, everybody will accept the US dollar as payment so there's tons of dollars floating around out there that aren't in any big hurry to come back home. By selling IOU's, the Feds are essentially printing money but the money doesn't necessarily go into circulation here so it doesn't affect our inflation rate so much. (Unless the government does something really stupid like imposing tariffs to limit the number of dollars being exported.)

    But it's not like the US has a lock on the luxury of being the international exchange currency - China would very much like to be able to print money and keep it floating around somewhere else so they're pushing to have the yuan replace the dollar and the Euro serves the same purpose in Europe. If foreign countries start getting worried about what's backing up the US dollar, you get a race for the exits as everybody abandons the dollar, the dollars start piling up unsold, inflation kicks in even without the Feds printing more money. You owe some investors a few trillion dollars and suddenly a few trillion dollars is about the price of a cup of coffee, that's when people start looking for you.

  • Jerryskids||

    But Trump's nonchalance about eliminating the national debt comes from his being the world's foremost expert on debt - when the debt gets too big you just declare bankruptcy and walk away from the wreckage and start over again with some new suckers investors. I'm not sure where he expects to find new investors when most of the ones on this planet would be quite glad to see the US economy crash and burn. Until they realize their own economies are tied to the US economy and when the US economy goes down it's taking everybody else with it.

  • Mcgoo95||

    Thanks for the explanation....makes sense. So really the only the way the debt truly becomes a problem is in the event of a global catastrophe or if there is successful attempt to replace the dollar as the reserve currency, in which case the whole world economy collapses. I guess I'll continue to not really care about it, although I would prefer the government exercises some fiscal discipline to mitigate inflation and prevent devaluation of the dollar.

  • VinniUSMC||

    Drugs are bad, mmkay Hihnfection?

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano cries like a whiny pussy whenever he's responded to.

  • JesseAz||

    The issue is the growth of the percentage of the spending going to just the debt. At some point it becomes the full budget.

  • VinniUSMC||

    Hihnfection. Why don't you just fuck off already?

    Person - brain + mental illness = Hihnfection

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano thinks Obama's $10.759 trillion is less than Dubya's $3.461 trillion or Trump's debt that hasn't even taken shape.

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano thinks his idiocy = proof.

  • Diane Reynolds (Paul.)||

    Congress could pass a law tomorrow and the president could sign that law and the debt would be paid in full with US dollars printed by the US mint.

    Which would render the dollar worthless.

  • VinniUSMC||

    Hihnfection.

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano thinks Obama's $10.759 trillion is less than Dubya's $3.461 trillion or Trump's debt that hasn't even taken shape.

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano can't do math, thinks he's Kreskin.

  • CE||

    Remind me not to vote for you. Anyone with savings would be wiped out from such a sudden inflationary move.

  • MikeP2||

    It's happening now whether you like it or not.

    The Fed is already using inflation to mitigate debt and the savers are losing because of it. As our social

    Anyone with money in the bank is being fleeced right now. Even the highest bank-offered interest rates are below the level of real inflation.

    This has been going on for decades.

  • ||

    you will have a major financial crisis

    "I say, let 'em crash."

  • shortviking||

    Raising taxes to pay for irresponsible spending is evil. Which means the Reverend-Liberal Alliance is for it.

  • DesigNate||

    ^THIS^

  • Still Curmudgeoned (Nunya)||

    Shut up, Hinh. No one cares about your progressive progressive policy alliance.

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano having another bitchfit meltdown.

  • maddarter||

    The Tea Party will take to the streets. They are all about fiscal responsibility.

  • circe801||

    AHAHAHAHAHAHAAAAA!!

  • A Lady of Reason||

  • Rockabilly||

    Why not print a 22 Trillion dollar bill and balance the budget ?

  • Rockabilly||

    It was in jest...

  • Social Justice is neither||

    So not a Krugman fan? wow, the last semblance of sanity if true and not a reflexive spasm of diseased neurons.

  • CE||

    I think we need eleven of those two-trillion dollar platinum coins about now.

  • Rich||

    To give some perspective, in "the last 10 years, the federal government has accumulated more debt than in its entire existence leading up to that period."

    To give more perspective: in the last 100 years, the dollar has lost more than ninety-five percent of its purchasing power.

  • Ken Hagler||

    Of course this is only the debt that the government is willing to acknowledge. The actual debt is about $100 trillion higher.

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano thinks Obama's $10.759 trillion is less than Dubya's $3.461 trillion or Trump's debt that hasn't even taken shape.

  • CE||

    As Ross Perot once said, "when you find yourself in a hole, first stop digging."

    That was like 15 trillion dollars ago.

    Now no one wants to try real austerity, or even modest half measures like Rand Paul's balancing the budget in 8 years, or Gary Johnson's balancing the budget right away.

    All it takes is to put a hard cap on spending. Cut the military and war budget significantly. Lay off all the non-essential government workers, and give the rest a five or ten percent pay cut. Freeze government hiring. A real CEO could clean up the mess in 4 years. And she'd have to, since she wouldn't be reelected. But it would work.

  • MikeP2||

    "A real CEO could clean up the mess in 4 years."

    Perhaps you don't understand who controls the budget within our governmental system.

    The only action a POTUS can take is to refuse to sign. The Executive branch has no authority to define the budget.

  • CE||

    The debt consists of $16 trillion in public debt, or what the American government owes to domestic and foreign investors, and $5.8 trillion in intra-governmental debt, which is what is the American owes to public accounts like Social Security.

    I don't see the distinction. Guess where the money to pay both public and intra-government debt is going to come from? Hint: it ain't the government.

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano thinks Obama's $10.759 trillion is less than Dubya's $3.461 trillion or Trump's debt that hasn't even taken shape.

  • circe801||

    "this mess"?? doesn't anyone here know how our economy really, actually works? it is a shame that the economics taught in this country still promulgate antiquated gold standard rhetoric. we are no longer on the gold standard--we run on a fiat currency system. the "old rules" no longer apply. the national "debt" is merely an ideological fearmongering tactic. written when the "debt" was a bit smaller--but please read this piece. it explains things a bit better than i could here: http://evonomics.com/isnt-time.....onal-debt/

  • MikeP2||

    ^^^

    Most writers and commenters on this site only consider trade and economic theories developed prior to fiat currency systems. It is a major intellectual failing here at Reason.

  • JFree||

    Fiat money has only existed in a single (though very long) downwave of interest rates. It is pretty obvious what the blindspot of any economic theory developed in that time in response to fiat will be. When that cycle changes and interest rates move up for a few decades, the proponent of momo theory will be gobsmacked by reality.

    And momo theory - called chartalism - dates back to before Keynes.

    The only real value of it is that it does do a far better job of explaining how money is actually created and who creates it. But re debt it is near useless.

  • ClosetedConservative||

    At least Trump is working hard to fix it...

  • MikeP2||

    "In an interview Brian Riedl, a senior fellow at the Manhattan Institute, Riedl told Reason's Eric Boehm that America essentially has two options left: "Either significantly raise taxes on the middle class or significantly cut benefits to current seniors. If we do neither, you will have a major financial crisis.""

    Any 'senior fellow' who doesn't acknowledge that fiat debt is entirely erasable with managed inflation is either lying or needs a demotion.
    What does he think the Fed has been doing for the last few decades?

  • JeffreyL||

    I keep seeing this question, but who will buy our debt

    Again, its the wrong question. By law, primary dealers are required to bid on every dollar auctioned by the US Treasury. If you want to see if there are stresses in the system, look underneath. When you start seeing money center banks leave the primary dealer system, that will be the tell you are looking for.

  • Social Justice is neither||

    Maybe if people opposed to increasing debt actually took on the enablers and initiators of spending we'd get somewhere. Increasing revenues with greater increases in spending are not caused by problems in revenue generation but reckless spending.

    Instead of going after people demanding we waste money on government "investments" and holding them accountable we get demands that the "investments" be improved and opposition to the spending is a half-hearted fleeting gesture but only if it can be done with out sending the wrong social signal about how much you care.

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