That’s how long it took to add another $1 trillion to the national debt.
On April 7, the debt pushed above $24 trillion. On Tuesday, May 5, it eclipsed $25 trillion.
It’s impossible to grasp just how big these numbers are. Consider that the debt is growing at an average of about $1.2 million per minute. Every day, Uncle Sam goes another $1.7 billion in hock.
According to the National Debt Clock, the debt to GDP ratio has risen to over 117 percent. Studies have shown that a debt to GDP ratio over 90 percent retards economic growth by about 30 percent.
Earlier this week, the U.S. Treasury Department announced plans to borrow $2.99 trillion in the second quarter. The Treasury also plans to borrow another $677 billion in the July-September quarter, bringing the total fiscal 2020 budget deficit to a projected $4.48 trillion. Given those numbers, the national debt will end fiscal 2020 over $28 trillion.
President Trump said he plans to address the national debt if reelected. He didn’t present any kind of plan, but he did say that the growing debt “bothers” him. It appears the plan is just to kick the can down the road by issuing longer-term Treasuries at zero percent interest.
“We’re putting in, we’re replacing debt with really long term good debt, zero, you know, which is a beautiful thing,” Trump said in a radio interview.
But who the heck is going to buy long-term bonds with no yield?
And refinancing doesn’t address the underlying issue. Uncle Sam has a spending problem. And he had a spending problem before the pandemic.
The federal government has run deficits over $1 trillion in four fiscal years, all during the Great Recession. The fifth trillion-dollar deficit was coming down the pike this year even before the massive stimulus spending in response to coronavirus. In effect, the federal government was already engaged in fiscal stimulus despite what Trump kept calling “the greatest economy in the history of America.” The deficit featured numbers you would expect to see during a massive economic slowdown — before the pandemic. Response to the coronavirus just put spending and debt in hyperdrive.
This isn’t the first time Trump has promised to address the national debt. He said he would take care of it when he was running for office.
“We’re not a rich country. We’re a debtor nation … We’ve got to get rid of the $19 trillion in debt,” Trump told The Washington Post. “I think I could do it fairly quickly. … I would say over a period of eight years.”
Two years later, the debt pushed above $22 trillion.
So, forgive me if I’m not confident about Trump’s willingness – or ability – to actually rein in spending and pay down the debt.
But make no mistake – we will pay for this – if not us, our kids and grandkids and generations to come.
Borrowed money has to be paid back. We are effectively taking future productivity and spending it now. There are only two ways to pay off government debt – higher taxes or inflation (devaluing your money).