Forty trillion dollars. That’s how big the national debt has become as of Wednesday, August 19.

The debt reached that $40 trillion milestone less than five months after hitting $39 trillion. At this rate, it will hit $50 trillion in six years, according to the Peter G. Peterson Foundation. 

The numbers are so big that it’s hard to wrap one’s head around them, so here’s some perspective: Forty trillion dollars is equal to roughly $116,700 for every American man, woman and child. It took almost 200 years for the national debt to reach $1 trillion in 1981; it’s grown $39 trillion in the ensuing 45 years. 

Much of that growth has come since the turn of the century. In fact, the debt has doubled in less than 10 years. 

Last year, the federal government spent $1.78 trillion more than it collected. Government deficit spending now comprises 5.8% of the U.S. economy. Can you imagine where the economy would be if we weren’t “borrowing” from our grandchildren? Continue reading →

Let’s be honest: The federal government probably will never balance its budget again, so eventually there will be a debt crisis. Times will be harder, and Uncle Sam will not be able to bail us out.

More evidence backing this bleak outlook came July 21, when the 10-year Treasury yield reached 4.6%. By July 29, it was 4.641%.

The 10-year Treasury note is one of the ways the federal government finances its borrowing. Investors in the United States and in foreign countries purchase the bonds and then receive interest on their investment. 

Who pays for that interest? Today’s taxpayers – and tomorrow’s. The higher the yields, the more taxpayers pay. While today’s amounts are not particularly high by historical standards, they’re 60% higher than the 2.8% percent average over the last decade. Continue reading →