subject: Is Federal Government Spending Failing America? Reviewing the National Debt [print this page] Is Federal Government Spending Failing America? Reviewing the National Debt
It is the total sum of money the United States government is indebted to the public due to the federal spending of states, foreign governments, corporations, and individuals. The National Debt includes Treasury Bills, Bonds, Notes, US Savings Bonds, and the local and state government Series securities.
Where the National Debt Stands
The National Debt has surpassed the $10 trillion mark as of November 2008. This is the debt that is funded by the income taxes of the general public. This is how Americans fun the military. It is also how the government pays interest on the total of the National Debt. Since 2003, the United States has increased its total debt by over $500 billion each year. In relation to how "rich" the United States is, this year the country has reached the all-time height of debt since 1955. Many speculate that the reason the debt has skyrocketed under the direction of George W. Bush is due to three of his major decisions in office: his decision to invade Iraq, his decision to lower the income tax of the rich, and his decision to deregulate Wall Street. During the course of his two terms in office, President Bush has helped raised the National Debt from $5.7 trillion to over $10 trillion.
When Did the National Debt Originate
The National Debt essentially stems from the United States governments need to borrow money due to their increasing budget deficits, meaning they spend more money than they earn. Because the government is then unable to pay back the full amount borrowed, there is an on-going need to borrow more and more money, all of which accrues interest that must be paid. It does not take long for the amount due in interest exceeds the original loan amounts. Since 1969, the United States federal government has spent more than it makes and has borrowed upwards of $9 trillion dollars, one trillion of which is interest due.
Spending That Leads to the National Debt
As mentioned, the National Debt accrues a large amount of interest which must be paid back. In 2008, the federal government used approximately $412 billion of tax payer dollars paying back interest payments. However, when compared to the way other tax dollars are spent, it is more than obvious the country is in desperate need of reversing the National Debt, learning to spend more wisely, and make a more equal division of tax payer dollars to the programs that matter to America and the public the most.
In contrast to the $412 billion in interest payments spent in 2008, the federal government spent:
$61 Billion on Education
$56 Billion to the Department of Transportation
$15 Billion to NASA
Curing the National Debt
While many citizens will be quick to point fingers at the war in Iraq, solving the debt crisis is not that easy. Even stopping deficit spending cold will not help turn things around. In order to bring the nation's economy back on track, many things need to happen including reforming Medicare and Social Security in addition to cutting costs and spending.
Failing the Nation
Many Americans have become very distrustful and disillusioned by the federal government. The constant rise in taxes does not seem to be producing any results. Because tax payer money is largely spent only on interest payments due on borrowed money, it is no surprise that tax payers see no improvements to roads, schools, or environmental issues but continue to see the increase in the taxes that are affecting their daily lives.
There is no overnight solution to the growing National Debt. It is with hope that President-Elect Obama will help to cut illicit spending and reverse the outrageous National Debt and the other financial crisis issues the United States is currently with; and, in turn, help individual citizens and the nation as a whole recover and bounce back to better financial times.
Tisha Kulak Tolar is a writer for DebtFreeDestiny.com where she regularly writes about debt consolidation, debt settlement and saving money.
