About Chapter 3 in “A Simple Guide” -The Federal Budget
It took the United States over 200 years for the debt held by the public to reach $5.521 trillion. The public debt is the cumulative sum of each annual budget’s deficit or surplus. Unfortunately, since 1968, there have only been just 5 years when the United States ran a surplus. The total of these 5 surpluses was $562.5 billion.
Worse yet, in just two years ending in September 30, 2010, the Obama Administration has increased this public debt by $3.5 trillion, or 63%. This huge and unprecedented increase is dangerous to our economy in many ways. Interest costs will increase at least 63%. But, the increase will more than likely be much greater. First, we need a lot more people to want to purchase this $3.5 trillion of additional borrowing. And, some foreign holders of our already outstanding debt many just start to sell it on the open market, because they believe our fiscal policies are unsustainable. One of the most dangerous interest rate spikes results from big holders of your debt selling it. All the fiscal problems occurring in Europe today exist because governments have borrowed too much money to deliver the false promises of socialism.
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