The US National Debt has officially crossed a sobering milestone this week, crossing $20 trillion for the first time in history. It’s hard to overestimate the significance of such a massive liability, but with numbers so large, the real-world consequences can be forgotten. What does this number really mean?
For one, the debt held by the public is now a shocking 77 percent of the entire US economy. A liability that high means that the economy can lag, investment in other areas can be crowded out, and huge amounts of money go every year just to paying interest on the debt. For another, such high debt makes it much more difficult to respond to unexpected events and crises.
What’s worse, even assuming everything goes as expected in the future, it won’t be long before deficits and debt rise to levels that are not just troubling but impossible to deal with and could even cause a national economic crisis.
Today’s milestone is not surprising — the choices to reach that point were already made, and have been being made for decades. Now is the time for lawmakers to start considering the tough choices necessary to turn things around.