The US National Debt: One Million Million Reasons Why It’s a Big Problem

On January 28, 2020, a report titled The Budget and Economic Outlook: 2020 to 2030 [1] was published on the website of The Congressional Budget Office.

The total outstanding public debt for the United States that day was estimated to be $23,243,925,228,178.

That’s 23.2 trillion dollars. One trillion = one million million = 1012. There are 12 zeros in a trillion.

The headlines in the press were interesting:

  • CBO Report Projects ‘Unprecedented’ Decade of Annual $1 Trillion Deficits [2]
  • The National Debt Will Be Almost as Big as the Economy by 2030, CBO Says [3]
  • U.S. debt's path ‘unsustainable,' House panel told [4]
  • U.S. deficit to eclipse $1 trillion in 2020, CBO says, as fiscal imbalance continues to widen [5]

The spike in reporting on this alarming report came, and went, in a matter of days.

This is the usual pattern when it comes to the topic of our national debt. Most people deal with uncomfortable situations by doing everything they can to ignore them. Our national debt is clearly an uncomfortable issue for most of us, including our elected officials, who are experts in this arena.

Oner spending

Our representative federal government tends to ignore the debt problem until there is a crisis. Since 1960 the federal debt limit [ceiling], according to the US Department of the Treasury, has been raised 78 times. [6] It may actually have been as many as 84 times. What is the debt ceiling and why raise it? The debt ceiling is the legal limit on how much the Department of the Treasury can borrow. When the federal government spends more than it collects, it borrows money to cover the gap.

So, that makes sense. If the government spends more than it collects, just change the rules mid-game so that we can borrow more.

Most of us, when we spend more than we collect (earn), stop spending so much. If we didn’t, it would quickly turn into a disaster.  

When the Treasury hits the debt ceiling, it implements a set of “extraordinary measures”. Like us, I’m sure that they stop spending so much.

It turns out that’s not exactly what happens. These “extraordinary measures” are generally in the form of the suspension of intragovernmental debt. Put simply, the government stops reinvesting money each day in certain funds, like retirement funds for federal employees, which immediately lowers the national “debt” and allows for more borrowing.

The effects of these “extraordinary measures” are temporary and limited by the amount “saved”. When the debt ceiling is inevitably reached again, government spending is limited to funds derived from tax revenues. No more borrowing. Right? That’s it. That’s the end of this addictive spending. Right? Wrong. The solution? Congress raises the debt limit. Of course.

Think of it like this. You have a credit card for your own personal use, and you don’t have enough money to make the payment. No problem. Just increase the credit limit. Voila. Problem solved?

US credit card

A few years ago Representative Tom Cole (R-OK) put it this way: “I mean, a clean debt ceiling hike is like having a credit card and saying ‘I've reached my limit, I'm just going to change the limit higher without changing any of my spending habits.” [7]

The problem (not the only problem) is that there seems to be little, if any, political will to alter spending habits, and raising taxes is not exactly what the politicians believe that the electorate wants to hear from their them.

So, the pattern is this: spend more than we have, raise the debt limit, borrow more. Repeat.

You may agree that this is a disturbing story. Unfortunately, this is way less than half of the story. Up until now we have only considered “discretionary” spending, and this only accounts for about 30% of the federal budget.

The remaining 70% of the federal budget is called “non-discretionary”, or “mandatory” spending. These mandatory programs include Social Security, Medicare, most welfare programs, and farm subsidies. The biggest programs by far are Social Security and Medicare.

Federal law dictates that spending for Medicare and Social security is determined by enrollment. The more people that are enrolled, the greater is the spending.

“Baby Boomers” are those born between the years 1946 and 1964 and represent the largest portion of our population other than millennials. It is estimated that 10,000 “boomers” per day turn 65 and that by the year 2030, all of them will be at least 65, and therefore eligible for Medicare and Social Security.

Remember that spending for Medicare and Social security is determined by enrollment. Currently, the Social Security unfunded liability is 15 trillion dollars and the Medicare unfunded liability is 79 trillion dollars. As of early 2020, the total US unfunded liability is actually in excess of 123 trillion dollars.

We are not on a path to insolvency. We are broke. 123 + 23 = ~ 146 trillion dollars broke.

Absent changes in how we manage our finances, some anticipate bankruptcy for Medicare in 2026 and for Social Security in 2035. [8] What happens when these two programs are gone?  We will have tens of millions of elder citizens who have nothing. The cost of caring for these people will be astronomical.

We The PeopleSo now we have set the table to seriously consider if there are One Million Million Reasons Why the US National Debt is a Big Problem for We The People.

These are in no particular order and, to be honest, there probably are one million million, but I decided on 12 because that is the number of zeros in a trillion.

  1. The current national debt is the highest it has been in the history of the United States, and it is rapidly increasing.
  2. Absent substantive changes in our federal finances, annual interest payments on the debt are expected to triple by 2029 and will likely exceed 1 trillion dollars annually. [9]
  3. Social Security and Medicare entitlements are at risk if the federal debt continues to grow. 
  4. We are spending more than we make and leaving the debt to the next generation. Herbert Hoover said: “Blessed are the young, for they shall inherit the national debt.”
  5. Over time, the standard of living will decline as government expenditures become consumed by interest on the debt.
  6. As the government accumulates debt, so too, it accumulates risk from the perspective of lenders. This results in increased rates on the offer of Treasury securities. This will result in corporation needing to raise the price of goods and services so that they can service the higher interest rates of their debt. The end product of this cycle is inflation.
  7. There is a direct relationship between the yield offered on treasury securities and the cost of borrowing money to purchase a home. As the rate on the Treasury bills goes up, the value of homes goes down because potential buyers are unable to afford larger loans. Inevitably, this will result in a net loss of wealth for We The People.
  8. Over time, our national defense will be compromised as we effectively allocate funds to more pressing issues.
  9. Over time, the government will be compelled to raise taxes to increase revenue.
  10. Economic growth will cease.
  11. Private sector investment will diminish as public sector debt increases. Eventually this will result in lower wages.
  12. The ability of the federal government to borrow when challenged by an emergency (e.g. war) will be greatly hindered by the higher risk.

And there you have it. 12 reasons why the US National Debt is a Big Problem for We The People.

One Million Million is going to continue to write about the issues surrounding our national debt.

Sure, we can just ignore the problem, but it won’t go away. In fact, it will simply continue to get worse.

Our mission is simple.

  • We will present the issues related to the US National Debt as fairly as we can to We The People.
  • We will regularly communicate to our elected representatives by the written word, the spoken word, and at the ballot box, the message that excessive federal spending is no longer tolerated.
  • We will explore every conceivable means of increasing federal revenues.
  • We are dedicated to the proposition that “Blessed are the young, and they shall not inherit the national debt.”

More to follow.

#OneMillionMillion #USNationalDebt

[1]       “The Budget and Economic Outlook: 2020 to 2030 | Congressional Budget Office.” [Online]. Available: [Accessed: 15-Feb-2020].

[2]       “CBO Report Projects ‘Unprecedented’ Decade of Annual $1 Trillion Deficits,” National Review, 28-Jan-2020. [Online]. Available: [Accessed: 20-Feb-2020].

[3]       C. L. Beilfuss, “The National Debt Will Be Almost as Big as the Economy by 2030, CBO Says.” [Online]. Available: [Accessed: 20-Feb-2020].

[4]       “U.S. debt’s path ‘unsustainable,’ House panel told,” Arkansas Online, 4:19. [Online]. Available: [Accessed: 20-Feb-2020].

[5]       J. S. closeJeff S. policy reporterEmailEmailBioBioFollowFollow, “U.S. deficit to eclipse $1 trillion in 2020, CBO says, as fiscal imbalance continues to widen,” Washington Post. [Online]. Available: [Accessed: 20-Feb-2020].

[6]       “Debt Limit | U.S. Department of the Treasury.” [Online]. Available: [Accessed: 20-Feb-2020].

[7]       M. Greenwood, “GOP lawmaker: House Republicans not likely to back clean debt ceiling hike,” TheHill, 08-Aug-2017. [Online]. Available: [Accessed: 20-Feb-2020].

[8]       “The Future of America’s Entitlements: What You Need to Know About the Medicare and Social Security Trustees Reports,” AAF. [Online]. Available: [Accessed: 20-Feb-2020].

[9]       “As Debt Rises, Interest Costs Could Top $1 Trillion,” Committee for a Responsible Federal Budget, 13-Feb-2019. [Online]. Available: [Accessed: 20-Feb-2020].

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