The U.S. broke $18 trillion debt mark on Friday November 28th 2014. It was on October 27th 1981 that we broke the $1 trillion debt level for the first time. One year before November 2014 the debt was at $17 trillion, which means in just one year we added a trillion on to our debt. When Obama took office the debt was 10.625 trillion – that means in six years the debt has increased 70%. We are literally drowning in our debt which is now at 103 percent debt to GDP. The worst part, it doesn’t seem to be slowing down.
Currently, roughly $13 trillion debt is held by the public; this includes Treasury securities and other instruments held by investors outside of the government such as state & local governments, corporations and individuals. The other $5 trillion is intergovernmental debt; money borrowed from Social Security and Medicare Trust Funds. Even worse, the Disability Insurance Trust Fund and the OASI Fund owe roughly $2.72 trillion. This means the U.S. Government owes money to all current and future beneficiaries of those funds. Dawn J Bennett makes the astute point that it is precisely because we owe ourselves this debt that the U.S. government says it’s alright to keep defaulting and owing a greater debt.
Currently the average debt per citizen is roughly $56 thousand the median household income in 2013 was $51,939. This means each citizen’s debt is greater than the median household, so how are we supposed to dig ourselves out of this hole? The government continues to tell us that if we simply raise taxes on corporations and individual corporations that this will solve everything. This isn’t a viable solution though. Raising taxes on individuals reduces the amount of money citizens have for investing and buying. Raising taxes on corporations will only serve to scare them and entrepreneurs away from the U.S. to countries overseas.
What our government needs to be doing is realizing that tax revenue is never going to really jump above 17% of GDP even if taxes are raised. They instead need to be working to develop policies that support entrepreneurs, reducing corporate tax rates and helping the American tax payer. Doing these simple steps would attract businesses from around the world and that would help employ American workers. Who once they have a job that pays well will be able to invest and help continue the cycle of building a stronger healthier economy.
Bennett Group Financial Services LLC, based in Washington, D.C., is a comprehensive financial services firm committed to providing opportunities to clients’ as they seek long-term financial success. Its customized programs are designed with the potential to help grow, lower overall risk and conserve client assets by delivering a high level of personalized service and skill.
For more information, call 866-286-2268 or visit http://www.bennettgroupfinancial.com
Securities offered through Western International Securities Inc. (WIS), member FINRA/SIPC. BGFS and WIS are separate and unaffiliated entities.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN as well as take podcasts on the road and forums for interaction.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett or firstname.lastname@example.org