INSIDE SOURCES

Ticktock: Congress needs to get serious about the ever-expanding national debt

May 2, 2022, 6:34 PM
national debt...
The national debt may impact the price of goods in a post-pandemic world. (Colby Walker)
(Colby Walker)

SALT LAKE CITY — Congress needs to get serious about stabilizing the national debt, which is growing even faster as inflation heats up, says a financial reporter.

As of March 31, 2022, the U.S. Treasury’s official figure for the debt of the federal government is $30.4 trillion, which means $91,406 for every American, according to Just Facts.

For contrast, in October 2008, the national debt was $10 trillion.

Eric Boehm, of Reason magazine, has details on a new report from the Congressional Budget Office. It warns that lawmakers in Washington, D.C., need to start slowing the U.S. debt now or suffer severe consequences later.

The CBO estimates that the federal government will add another $12.2 trillion to the debt by 2031, according to Boehm’s article.

National debt growing

He joined Inside Sources host Boyd Matheson to talk about grabbling with the debt and what inaction will inevitably bring.

In politics, Boyd pointed out, the party out of power talks about getting spending under control. And the party in power spends and spends.

“It doesn’t matter whether it’s Democrats or Republicans, we’re equal opportunity offenders there,” he said.

Tipping point of the national debt

Boehm said the CBO report released last week stated the size of the debt is as large as the whole U.S. economy. Or, 100% of the Gross Domestic Product (GDP).

“Basically, the CBO says, ‘Look, lawmakers have to get serious about this by 2026 if they want to have any chance of holding the national debt level at 120% of GDP,” Boehm said.

Boehm said that number — 120% — is a point of no return.

“It’s a figure that a lot of economists suggest is a threshold that really you can’t go past because you end up having all sorts of negative economic consequences,” he said.

“History doesn’t bode well for countries that once they get past that 100%, 105% of GDP. It just rarely seems to end well,” Boyd pointed out.

“We’re sort of in uncharted territory here. We’ve never really seen in modern times a country the size of the United States go through something like this. Greece, of course, is sort of the one standout example. Their financial problems really began once that country tipped past 100% of the GDP,” Boehm said.

Interest never sleeps

Every dollar spent on the interest pays for debt on purchases the federal government made in the past.

Boehm said every dollar spent on the interest on the debt can’t be used to pay for government services for Americans. And can’t be put to more productive use in the private sector of the economy. 

“That’s really where the problem is . . . as the debt gets larger, you end up with larger and larger interest payments, obviously, and that’s just dead money. It’s just money that comes out of the economy that is put to no productive use,” said Boehm.

Inflation nation

In a move to slow the rise of inflation, the Federal Reserve anticipates raising the interest rate multiple times in 2022, without stalling the economy into a recession. The first hike in three years occurred in March.

Financial markets expect the central bank on Wednesday to announce a half-percentage point increase in the Fed’s benchmark interest rate, according to CNBC.

Boehm said rising interest rates will raise the cost of paying down the debt as well.

“That’s just money that’s going to finance the costs of stuff that the government already bought in previous years,” he said.

Inside Sources with Boyd Matheson can be heard weekdays from 1 p.m. to 3 p.m. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app. 

 

Today’s Top Stories

Inside Sources

first freedoms first...
Boyd Matheson

First freedoms: The interconnectedness of First Amendment rights

If all Americans do not put the first freedoms first KSL NewsRadio host Boyd Matheson says we will not have a sustainable, lasting republic.  
4 months ago
Bears Ears National Monument sign with the five Tribes' insignias on it....
Curt Gresseth

Along with Utah, outdoors group sues over Biden restoring boundaries of Bears Ears

An outdoors and public-lands access group is joining the state of Utah is suing the Biden Administration over restoring the boundaries of the Bear Ears National Monument, arguing the move harms local farmers, miners and members of the Native American community.
5 months ago
On Wednesday, President Biden announced forgiveness of some student loan debt.
AP Photo/Evan Vucci,...
Curt Gresseth

Taxpayer advocate says president alone should not have power to cancel student loan debt

A taxpayer advocate said Mr. Biden's forgiveness of student loan debt is a result of Congress abdicating its power to the executive branch because of politics.
5 months ago
FILE: Head Coach Ray Scott of the Detroit Pistons  watches his team from the bench circa 1972 durin...
Waverly Golden

NBA Coach Ray Scott on building community, leading a team, and breaking barriers

Learning about the deep-rooted segregation in the United States inspired Ray Scott to bring awareness to the issue both in terms of the NBA and society. 
5 months ago
Rep. Stewart at the Security Summit...
Samantha Herrera

Stewart Security Summit takes a look at the US’s place in the world

Ahead of the Stewart Security Summit on August 5 in Salt Lake City, Rep. Chris Stewart joins Inside Sources to discuss the event.
6 months ago
A customer pumps gas at an Exxon gas station, Tuesday, May 10, 2022, in Miami. U.S consumers have s...
Curt Gresseth

UVU commencement speaker tells her story of rising from high school dropout to bank president

Mary Daly shares her story of rising from high school dropout through the nudging encouragement of her mentor to become president and CEO of the Federal Reserve Bank of San Francisco.
9 months ago

Sponsored Articles

Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...
Sorenson

The best tools for Deaf and hard-of-hearing workplace success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...
Macey's

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
christmas decorations candles in glass jars with fir on a old wooden table...
Western Nut Company

12 Mason Jar Gift Ideas for the 12 Days of Christmas [with recipes!]

There are so many clever mason jar gift ideas to give something thoughtful to your neighbors or friends. Read our 12 ideas to make your own!
wide shot of Bear Lake with a person on a stand up paddle board...

Pack your bags! Extended stays at Bear Lake await you

Work from here! Read our tips to prepare for your extended stay, whether at Bear Lake or somewhere else nearby.
young boy with hearing aid...
Sorenson

Accommodations for students who are deaf and hard of hearing

These different types of accommodations for students who are deaf and hard of hearing can help them succeed in school.
Young woman receiving laser treatment...
Form Derm Spa

How facial plastic surgery and skincare are joining forces

Facial plastic surgery is not only about looking good but about feeling good too. The medical team at Form Spa are trained to help you reach your aesthetic outcomes through surgery and through skincare and dermatology, too.
Ticktock: Congress needs to get serious about the ever-expanding national debt