The U.S. government's national debt is growing by almost $1 million per minute, or $1.4 billion per day. Merely paying the interest on what this debt has become is anticipated to place an increasing strain on public programs.
The debt has grown from $5.7 trillion in Jan. 2001, when President George W. Bush took office, to $9.13 trillion today, and is expected to climb past $10 trillion by the time Bush leaves office at the beginning of 2009. Because the interest on the debt keeps compounding, the percentage of the national budget that interest payments take keeps climbing. In 2006, the government spent $430 billion to pay interest on its debt.
''We pay in interest four times more than we spend on education and four times what it will cost to cover 10 million children with health insurance for five years,'' said Speaker of the House Nancy Pelosi. ''That's fiscal irresponsibility.''
Paying down the interest on the national debt is close to becoming the third largest area of government spending, following current military spending in second place and guaranteed health and retirement benefits in first. As more baby boomers hit retirement age, government retirement and health spending is expected to skyrocket, making interest payments even more of a financial strain. The only solution at that point will be to raise taxes, cut government spending or borrow more money.
The latter solution will only work as long as the government can still find lenders, which is looking less and less likely as the debt climbs and the possibility of a default increases.
''The first day the Chinese or the Japanese or the Saudis say, `we've bought enough of your paper,' then the debt, whatever level it is at that point, becomes unmanageable,'' said former congressional budget analyst Stanley Collender.
Four trillion dollars of the national debt is "publicly held," meaning that the government owes it to various government accounts and programs, such as Social Security. The remaining $5.1 trillion is held by individual investors, banks, pension and mutual funds, and local, state and foreign governments who have purchased U.S. Treasury bonds.
Click to view image: '197567-Closeupmoney.jpg'
|Liveleak on Facebook|