The increase in the National Debt and the impact on the interest we must pay each year on that debt is a major and growing problem for the country. Many on this Blog site either ignore this issue or attempt to marginalize the issue because they do not want to have to admit first the cause and second the solution.
Mr. Walker has been trying to explain the real danger that faces our country as never before. The reason is because of the size of the issues as well as the number of major issues that just keep getting worse because we refuse to change our policies.
To make the issue clear, the U.S. is like a family that has a large mortgage and finds they do not have enough money each month to pay their bills. So they go to the bank and get a Home Equity Line of credit. Each month they use part of the Home Equity line to meet that portion of their monthly bills that their salary does not cover. At some point the roof begins to leak and they rush to the bank for the money to fix the roof. When the bank looks at the amount they owe and the monthly interest they must pay compared with their income they are turned down for the loan and they have no way to fix the roof. That is what is taking place on a GRAND scale with the fiscal management of our government.
This started in earnest in 1980 when our national debt was less than a Trillion dollars and the interest was about $60 Billion. Today the National Debt is $ 9 Trillion and the annual interest is $450 Billion Dollars. The people who support the Supply Side Economics that produced the first batch of debt starting in 1981 and the second batch with Bush in 2001 argue that it makes no difference because the debt is the same % of Gross Domestic Product (GDP) in 2007 as it was in 1981. That is NOT correct. In 1980 the REAL GDP expressed in constant dollars (2000 dollars) was 5.2 Trillion and the National Debt was 1 Trillion Dollars. In July 2007, GDP is 11.5 Trillion and the National Debt is $9 Trillion. In 1980 the debt was 20% of GDP (1 Trillion / 5.2 Trillion). In 2007 it is 78% of GDP (9 Trillion / 11.5 Trillion). In addition the impact of paying $450 Billion of the $2.7 Trillion dollar annual budget is a major issue. We are spending 17% of our total budget on interest that pays for nothing but the past when we refused to Tax the same amount as we agreed to spend.
Finally, this situation is getting worse as we continue to have an annual deficit on the $400 Billion range which gets added to the total National debt each year. That increases the interest even more. Until we both balance the budget and then begin developing a REAL SURPLUS that is used to pay down our debt we will be forced to continue paying the huge interest. We are paying almost as much on Interest as on National Defense.