Resistance Begins at Ohm!

Wednesday, March 18, 2009

National borrowing and interest payments

A significant chunk of change paid out with each year's budget is for interest. $451,154,049,950 in 2008 according to the Treasury. It would be one thing if the interest payments were going back into the US economy, but they aren't. About half the debt is now held by foreign countries and investors. So, not only are we sending huge amounts to China for goods, India for services, and the middle east for oil, we are sending something like 20% of federal government revenues ($2.521 trillion in 2008) somewhere else besides the US. You think maybe the economy would get a boost if we weren't doing that? By the way, before 1980, we did not sell our debt to foreign countries. But the debt got so big, we couldn't afford as citizens, to buy it all ourselves.

Not even the Government Accounting Office believes we can continue down this path. But we have to reverse the direction, not just stop where we are now. The solutions will be painful and it comes down to how many generations you want to feel the pain.

We can not keep borrowing more and more money. Eventually we will not be able to pay even the interest. Foreign investors will want their money back before we get to this point. What are we going to pay them back with? Carbon credits?

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