National Debt Levels

If you live in the United States and keep just one eye on the news from time to time you are probably well aware the country is in debt. Not only is this a popular news stories, but there are many websites devoted to the subject as well as a movies and documentaries. Is this a big problem from an economic point of view? Yes, it is important, but it appears that those “in charge” are not overly concerned. Instead, they are letting the national debt grow and grow. Soon enough it may be out of control.

Since September 2007, the national debt in the United States has increased an average of $3.8 billion per day. Yes, that is per day! So you can see just how easy it is for the debt to grow to new levels?

So what is the USA national debt level at this time? Currently, the number stands at roughly $12 trillion. For most of us, this number is so big we have never even seen it written on paper.  It is an exponentially vast level of debt and growing. In fact the number is so large that the national debt clock in Mid Town Manhattan had to remove the dollar sign when the national debt went from $9 trillion to $10 trillion in order to fit in all the digits that were required.  Here is a news clip on this national debt news story.

The number one reason for this debt is the increase in government borrowing. The more money the United States borrows, the more they will have to pay back in the future. Just like consumer debt, national debt grows exponentially over time. The only difference is that the USA national debt involves larger numbers.

Who are we in debt to? This national level of debt does not include the debt of local and municipal governments. The debt is the debt liability of the country or tax payers to lenders within this country and to lenders from abroad, internal and external debt. The US Government borrows by issuing securities, government bonds as well as bills or creating more money supply.

What are the problems associated with government borrowing? Some of them include destabilizing the private sector, and higher interest rates, which are meant to attract new lenders.

Fortunately, it appears that the recession has beaten some sense into both private households and companies. In 2007, total debt for the United States, including both private and public sector, grew at a rate of 10 percent. Now, this number is down to a three percent debt growth rate. The reason for this is that most people and organizations finally saw how much debt they were facing. And with the economy weakening, more and more people were interested in paying off debt as opposed to taking on more.

The national debt by the United States government is a different story.  It will be interesting to see if the government continues to borrow and spend, or finally begins to cut into this debt.  This article is written by staff of Credit Creator.com.