A Large National Debt~ Does Danger Lurk?

A few years ago, I watched a video created by Ron Paul where he talked about the dangers of a U.S. debt that keeps growing. I knew that Paul ran for president at one time, so I looked it up to jog my memory. He ran for president in 1988 as a libertarian. His son, senator Rand Paul from Kentucky, is also an outspoken critic of government spending. I guess the apple doesn’t fall far from the tree. I don’t remember many of the details of Paul’s video, but if I recall correctly, he did warn of economic problems if that trend continued, an ever-increasing national debt. The devaluation of the dollar was one fear, and he recommended investing in gold in order to protect yourself. Last year I read an article by an economics professor that claimed the wars in Iraq and Afghanistan contributed $8 trillion to our debt. Over a 20-year period he said the overall U.S. debt increased by $15 trillion, where $8 trillion was attributed to those two wars and the other $7 trillion was due to the 2008 housing crisis and the resulting government bailout of the banking and investment companies, plus the pandemic. Regardless of how we got there, our debt has now reached $36 trillion. 

   last year I read an article that referred to an Op-Ed published by the editors of the New York Times, where they said it’s time that republicans face the fact that taxes need to be raised, and democrats realize that social security and Medicare need to be cut. Just recently on a news show, a guest on the show mentioned that the interest payment on our debt has reached $1 trillion. That’s more than we spend on the  military, which is around $850 billion. 

   I disagree with the editors at the New York Times, who said we have to raise taxes and cut social security and Medicare, instead, why not come up with a plan to pay off the debt, it could be a 5-year, 7-year, or even a 10-year plan? $1 trillion a year is a lot of money, and if it didn’t go to interest payments on our debt, we wouldn’t have to cut those services. How much is $1 trillion? If the government started printing $1 million dollar bills, and you made a stack of 1,000-million-dollar bills, which would be $1 billion, it would take 1,000 stacks of $1 billion to equal $1 trillion. That’s a huge amount of money, and by paying off the debt, that huge amount of money could go for programs that benefit Americans, without raising taxes and cutting social security and Medicare. My opinion, anyway.

   There are dangers of having a large national debt, especially one that keeps growing, and the warnings economist have made are, a potential economic collapse, pressure on interest rates, keeping them higher, and the possibility of the Dollar being devalued, which would be devastating to working class Americans.

   I want to share a story about an experience I had while working at a hardware store. One day a customer walked up to me and asked if we sold hand tools. He quickly added, “I don’t mean that cheap Chinese stuff.” He didn’t say “stuff”, he used a little more colorful word. So together, we started pulling tools off the racks and looked at the back of the packages, and both of us found the same thing, most of the tools were made in China. I found one brand, Channellock, where every tool had USA stamped on it. I found two Craftsman tools stamped USA, and the other Craftsman tools were made in China. That day started a little game I played, and when the truck from the warehouse arrived once a week, with items that replaced the items sold the previous week, as I was putting things away, I would flip the package over and look for their place of origin, and I was surprised just how many items were made in China. I still do this from time to time when I get home from shopping and put things away. Nothing seems to have changed, I still find most items are made in China. The reason I mention this is, if the dollar were to be devalued down the road, how much would these imported products go up in price? Suddenly the dollar would be worth less, and those imported goods would go up in price. The sheer number of products in our stores that are imported would cause a real burden on consumers if prices suddenly jumped because the dollar was devalued. Something I hope never happens.