The U.S. Debt
The U.S. national debt is at post-war record highs, both in dollars and as a share of the economy. And not only has it grown from 35 percent of GDP in 2007 to 74 percent today, it is projected to exceed the entire economy sometime in the 2030s.
Ever-growing levels of debt threaten citizens’ and families’ economic well-being in a number of ways. A large debt:
- Hurts wages and jobs
- Prevents us from growing the economy
- Makes borrowing more expensive for important investments
- Threatens the safety net
- Risks a real crisis
Drivers of the Debt:
- Population Aging: As the population grows older, spending on Social Security and Medicare will increase dramatically. Additionally, older Americans will no longer be working and will pay fewer taxes, leading to lower revenues.
- Rapid Health Care Cost Growth: Federal health spending is currently equal to 5.5 percent of the economy. In 25 years, it is projected to rise to approximately 8.8 percent.
- Growing Interest Costs: As interest rates return to normal levels, the cost of interest payments on debt already borrowed will increase.
- Insufficient Revenue: The historical amount of revenue collected is not sufficient to afford record-high levels of retirees, health care spending, and interest. Our debt problems are so large they cannot be solved by either spending cuts or revenue increases alone.
Learn More: www.fixthedebt.org