From Billions to Trillions

by Derek Hanley

In 1981, as Jimmy Carter was ending his one-term as president, mortgage rates in America hit 18.5% in some places.

Jimmy Carter became alarmed at the rising rate of inflation under his administration. Rather than turn to the House of Representatives, which is responsible for the national purse, on whom he could not rely, he appointed Paul Volker in 1979 in to head the Federal reserve to curb inflation. He gave Volker a free hand to do so.

Volker believed only strong measures would work, so he raised interest rates to the degree that mortgage rates went up to 18.5%. Unemployment soared. But inflation was beaten down.

President Carter added $299 billion to the national debt (42.7%), increasing it to $908 billion.

Following Carter, Ronald Reagan increased the national debt by $1.86 trillion (186%).

George W. Bush added $5.85 trillion (101%) to the national debt.

Barack Obama added $8.6 trillion (74%) to the national debt.

Donald Trump added $6.7 trillion, ((33.1%), mainly because of the Covid 19 Pandemic.

.From Billions to Trillions

Notice that Carter's addition to the national debt was in $billions, after his presidency, additions to the national debt were always in $trillions.

How America has changed in such a short period of time.

In 1980, the U.S. national debt was $908 billion and represented 26% of GDP.

Today, the national debt is $34.5 trillion and is 123.48% of GDP.

The debt to GDP ratio is a measure of how our economy can withstand national debt. A ratio of 123.48% means that our debt is growing faster than our economy by 23.48%. Each year, since the Carter presidency, the debt to GDP ratio has been getting worse.

According to Statista.com, by 2034, the national debt is estimated to be $54,386 trillion, increasing at roughly $2 trillion a year. Three years ago, an article published by Forbes predicted that the national debt could be as high as $78 trillion by 2028.

The current year national debt at $34.5 trillion amounts to $266,500 of debt for every federal taxpayer. In addition, the interest we are paying on that debt is now $768 billion a year.

The constant demand for more government services, the continued un-budgeted costs to fund foreign wars, the continual rise of the federal workforce and its heavy burden, and the uncontrolled influx of millions of illegal immigrants every year, plus the steep build-up of debt throughout the economy are pressuring the limits of fiscal/financial equilibrium.

Unfunded Liabilities Grow Unchecked

But, according the “National Debt Clock Real Time,” off-the-books unfunded government liabilities are even worse.

The unfunded liability for Medicare is $40.9 trillion and Social Security is $26.7 trillion. The total of U.S. unfunded liabilities is a frightening $213.6 trillion. Those liabilities amount to $634,946 per citizen.

Now, the Tom-Toms are beginning to pound in academia and in the highest levels of finance. They warn that the size and growth of the national debt puts the whole economy in danger.

Members of Congress in both parties are ignoring these warnings. None of them want to touch this. They are all hoping that there will be enough chairs available when the music stops. History shows that Congress has been repeatedly absent for years in enforcing their powers to control the purse strings of government. Just as they have surrendered Congressional power to define and interpret policies and laws to un-elected managers of many government agencies who now rule us through enacting endless new regulations.

We live in an uncertain world with many variables affecting both the world economy and the U.S. economy. We need a firm steady hand to guide America through the next decade, yet what are our options?

The odds are that if Biden is re-elected that his vice-president is likely to be asked to assume the presidency and then would be the candidate for another term.

America First but Not Alone

If Trump can overcome all his legal issues and is elected president, he must be the one to act to control the growth in the national debt. He is a man not bound by the conventions of the political class and the Washington swamp. He has the energy and tirelessness of a much younger man. He does not see the world through the political prisms of either party. His creed is “America First”

During his first term, he was the only American president to call out the fantasy of NATO being a formidable deterrent to Russian aggression. NATO was a joke as a competent military organization. Only France and Britain were anywhere close to the military strength necessary for the task. The Ukraine war demonstrates this. The failure to deter Russia from invading and taking possession of Crimea under Obama's presidency was the worst example of Western weakness and it invited the invasion of greater Ukraine by Russia.

Trump was the only man to take presidential action to stem the enormous growth in illegal immigration across our borders.

Only Trump will act to send them back.