The United States national debt has increased on average 8% a year since Nixon unhinged the gold standard in the 1970’s.
The gold window was closed. The U.S. monetary system officially became one purely of fiat money. And ever since then, the national debt was unleashed. Government spending way beyond its means became normal.
The debt during 1950 was 257 Billion dollars. The debt as of this writing has broken through 23 Trillion dollars.
And there appears to be no consequences, and certainly no end in site. Big spending continues. Massive money printing (mostly digital dollars) continues while more and more debt is piled up. It’s actually happening worldwide.
So does it actually matter?
It most certainly matters on a personal debt level! Banks will lend you money, but only up to a point. Banks need you to pay it back, with interest. Too much debt and there may be default. If you don’t pay your loans every month, the lender banks will come after you. If you don’t pay your property taxes, the government will come after you.
However the U.S. government (and many state and local governments) seem to be able to spend and spend without repercussions. How is that?
State and local governments will tax you more (one way or another they’re gonna get ya…).
The federal government borrows more. They sell debt to other countries, to big investors, and even the Fed itself is on the hook for Trillions. But the scheme just keeps on going.
Seemingly never a hiccup. More debt? No problem! It must be nice to work for the government. No need to turn a profit. Just spend other people’s money. So does it even matter? (spending Trillions more in debt each year?)
Trump’s 3 years so far has seen an average annual increase in spending of 1 Trillion dollars per year.
Obama’s 8 years spent on average 1.2 Trillion each year of extra debt.
As a percentage of existing debt, here’s how the presidents lined up with excess annual spending (on average for their term), since going off the gold standard.
Trump 5% (3.1 Trillion so far)
Obama 8% (9.5 Trillion)
Bush 7% (4.3 Trillion)
Clinton 4% (1.6 Trillion)
Bush 11% (1.4 Trillion)
Reagan 12% (1.7 Trillion)
Carter 9% (0.3 Trillion)
Ford 9% (0.2 Trillion)
The numbers keep getting bigger as the currency itself devalues.
I recently got my annual property tax bill. And I suppose that’s why I’m writing this today (sore about government spending). What a surprise, my taxes went up again. Substantially. This time crossing another threshold of the next ‘thousand’ dollars (each increment is psychologically painful).
The rate at which general spending is increasing by government, is seemingly ridiculous. But they’re getting away with it.
Is there a state out there with a relatively low tax burden? Maybe it’s time to look around 😉
[ End Of Rant ]