The National Debt: Digging Deeper Into Why We’re Digging Deeper
The US national debt is now at 100% of Gross National Product, in other words equal to what we produce in a year. Forty cents of every dollar the US government spends is borrowed. Horrible, cry the pundits! The government should behave more like a family with a budget, should know when to stop spending! Let’s consider, though, that the average home-owning family takes on a mortgage equal to two or three times its annual earnings. (Before the crash, this number was five, not two or three.) In the US, it’s common for this family to spend 40% of its monthly income servicing the mortgage debt. So far, then, the government is acting exactly like a family – and a fairly responsible family at that, as we’re not even talking about families that abuse credit cards. read more