America's national debt cannot grow beyond a limit imposed by Congress known as the "debt ceiling."In 1919, just after World War I, the limit on U.S. borrowing was $43 billion.By 2001, it had grown to $5.9 trillion.
Today, the debt ceiling is at an all-time high of $12.1 trillion.When President George W. Bush took office in 2001, our public debt amounted to 33 percent of our economy.
Today, it is 60 percent of our gross domestic product. If we do nothing, our debt is projected to swell to over 70 percent by 2019.To put those numbers in perspective: If you divided the debt equally among all Americans, every man, woman and child living in the United States today would owe more than $39,000.
Next month, members of Congress will be asked to vote to raise the roof on our allowable debt for the ninth time this decade.Before such votes, it has become customary for Treasury officials to write members of Congress warning of the dire consequences of restricting the federal government's ability to borrow.
There should be no mistake: These consequences are real. What those letters often fail to mention, however, are the equally dire consequences of the status quo. Long-term deficits drive up interest rates for consumers, raise prices of goods and services, and weaken our country's financial competitiveness and security.
The bigger our deficits, the fewer resources we have to make critical investments in energy, education, health care and tax relief for small businesses and middle-class families.The bigger our deficits, the more we must borrow from foreign creditors like China, allowing governments with competing interests to influence our economic and trade policies in ways that run counter to our national interest.
Last week, I was joined by a handful of my colleagues at a Senate Budget Committee hearing on strategies for reining in our exploding debt. United in our concern that Congress lacks the will to get our fiscal house in order, we mounted what I termed an "institutional insurrection."Our unsustainable debt is neither a Democratic nor a Republican problem. It is rooted in the DNA of both political parties. Some in Congress like to spend more than we can afford, and some like to cut taxes more than we can afford. The easy path is simply to borrow until the credit markets will no longer allow it.
This approach violates something fundamental in the American character. Every generation before us has been willing to make the tough decisions and hard sacrifices required to ensure our children and grandchildren inherit a better way of life and stronger country. Now, it is our turn.The path of least resistance that we have trod for so long is the path to national weakness. If you have the same people and the same process, you are going to get the same results.
Of course The FED is threatening "Talk of eroding the Fed's independence can be counterproductive for economic recovery," St. Louis Federal Reserve Bank President James Bullard said in slides to accompany a presentation prepared for a panel discussion in New York.Bullard said that non-independent central banks have historically been forced to finance large government budget deficits. "This can be very inflationary," he added.
Well just think of all the interest alone we would save by ending the Fed and how our government would be reigned in on spending. What has our government done to the dollar? The road to Hell is PAVED with good intentions. Links are below but without changing the spending or ending the fed we are on the Highway To Hell.