In case you hadn’t noticed, the U.S. Regardless of the federal government deficit being well within the limitations that international economists recommend (3 percent, or less), the size of the underlying personal debt makes what were seen as fair deficits quite cumbersome customarily. 19 trillion debt. When the underlying personal debt is so large, even relatively small percentages from it add up to tremendous amounts. The bigger the debt becomes, the bigger the deficits become.
It’s called exponential growth. The center of the problem is that Congress has reconciled spending with revenues never. It either needs to collect more, spend less, or both. But that happens never. Debt can be productive if it is utilized for investments that result in positive returns. Unfortunately, the U.S. (like a great many other countries) is malinvesting, while facing ever increasing debt-to-GDP ratios.
The worst form of personal debt, which undermines an economy and can be crippling, is that which can be used to fund existing debt. Essentially, the government must borrow in excess of half-a-trillion dollars this year to keep paying those whom it already owes tremendous sums of money. We owe our creditors more constantly, year after year, decade after 10 years.
- September 2017: $1,000 additional investment
- 2012 5.5% 7.5%
- 78% as a small percentage in lowest terms is 39/50
- Exchange Rates (International value of U.S. buck)
Infrastructure is the items that ultimately will pay for itself and helps the overall economy grows. I’ve long advocated that the united states should restore its infrastructure for the 21st Century. It would create jobs and make the overall economy more productive, which would eventually create more tax revenue. The precise infrastructure categories that require the most immediate attention and investment are debatable. Some might argue that more roads are the wrong investment, noting that unless we all shift to all electric cars our fossil fuel addiction will be our demise. More light rail in and around urban centers and their suburbs may be considered a wiser choice. Regardless, our roads are crumbling and bridges are collapsing. This is a matter of national safety.
Lives are very literally in danger. But that’s not the only public safety hazard resulting from our antiquated infrastructure. “Excessive business lead levels have been found in almost 2,000 water systems across all 50 says, impacting 6 million Americans” reports USA Today. That is why infrastructure issues. America is antiquated, crumbling and unfit for the 21st Century. 19 trillion debt, any further massive deficit burdens would be politically and fiscally risky.
But with rates of interest historically low, if we’re ever going to make these much-needed investments, the time is now. It’s just hard stomach our personal debt has increased to such incredible levels now. 20 trillion. This massive debt is already hindering financial growth, which leads me to question, how much more will growth be constricted by our debt in the coming years? However, it ought to be noted that as our personal debt is continuing to grow bigger over time continuously, so has the economy.
The IMF quotes the U.S. this year 19 trillion. Rebuilding our infrastructure, a lot of which dates to the early and mid-20th Century back, will put a lot of people to work in well-paying jobs. But those working jobs will be temporary, not permanent. China carried out its own massive infrastructure build out lately, and today that it’s completed they have an incredible number of idle workers.