Review of US debt problem via borrowed money – Loan Finance and Money

Debts can arise between individuals, between companies and individuals, public institutions and individuals, government agencies or governments with other governments. The history of the United States debt can be seen starting back many years ago. And over time (like other governments), it is clear that debt has only increased and increased for the United States since 1791.

Money borrowed when securities are issued is one of the major problems the US has today with debt.

money loan

The public debt in the United States involves money that the federal government has borrowed by issuing securities with other agencies of the government as well as its own.

More simply, the US debt can be divided as follows:

Debt held by private
First, it is the portion of debt held by individuals. They consist of securities from investors, the Federal Reserve System, foreign states and even local institutions. The other part of the debt is intra-government debt such as the Social Security Trust Fund.

Debt has long been a problem in the United States. It is a question of why the government continues to incur debt despite its overwhelming economic growth. Public debt is variable and can increase or decrease depending on the annual total budget surplus or government deficit. This so-called government budget deficit or surplus is the difference between what the federal government received and its spending, with the exception of intra-state transfers.

Over the years, US debt has only risen and risen. It is a fact that is not at all surprising considering all cost items, the United States as a society has experienced. US debt increased by about $ 500 billion in each fiscal year. Recently, the national debt reached $ 14710 billion. Of this gross debt, just over ten trillion are by the government and citizens, while the remaining 4 ½ trillion is debt between governments.

Here is a review of the US debt problems.

money loan

The rivalry between Democrats and Republicans makes everything worse …
The great rivalry between Democrats and Republicans in the US government is not just based on dry politics. They have also debated whether rising debt, the US faces. On the one hand, Republicans argued that the United States may have reduced debt with smaller states and fewer and lower taxes. Conversely, Democrats have explained that with a larger federal government and higher tax rates, everything can be turned for the better.

Republicans have a point that the larger states are also leading to an increase in spending for the US government, thus increasing debt. But the Democratic government led by Barack Obama is aware of this and much more, and on August 2, 2011, President Obama signed a “bill” that supposedly averted the possibility of financial dilemma. The US government will take all necessary measures through legislation or policy to reduce the rapid rise in government debt. The alternative is bankruptcy ..

US debt was founded in 1791
As early as 1791, it is possible to discover the first signs of a debt in the United States. Borrowing of debt, which the United States began during the American War of Independence, at this time amounted to about $ 75 million. From that time, the federal government regularly held all debts. Big waves in the national debt, however, were then a natural consequence of the American civil war. From the above amount ($ 75 million), US debt has increased to one billion in the year 1863, and then rose again to $ 2,700 million by the end of the war. The following year, the state of the United States only larger and larger deficits, which also means a larger debt to stack on their feet.

We turn back the time before the First World War.

Here, the national debt in the United States increases by $ 25.5 billion. More deficits came as a result of social programs during the Great Depression in 1930. Suddenly it went fast: In 1950, US debt of $ 260 billion.

From 1965 onwards the national debt continued to rise. This is the result of the rapid increase in debt relative to GDP growth or GDP growth. During the reigns of President Bush and Reagan, debt increased to four times as much as before!
In President Bush’s time, debt to the US rose to $ 5.7 trillion in 2001, and over $ 10 trillion in 2008. During President Barack Obama’s reign, a debt of over $ 14,000 billion was a reality in February 2011.

Understand GDP to understand US debt

Understand GDP to understand US debt

The history of the US national debt is closely linked to GDP, as GDP is important in the economic aspect of all governments. GDP indicates gross domestic product, which is to be understood as a bottom line for an entire country – it is a deficit, running the country with the deficit as a whole. In the United States, we finally reached the point where debt exceeds a full year’s GDP, which should make all alarm bells ring on all politicians.

The federal government expects US debt to increase by 100% of GDP by 2015. Not exactly bright prospects. The national debt history in the United States has also increased due to interest such as natural loans (the interest rate on a loan, for example. Often at 20-30%) to be paid. The higher the debt, the more interest, of course. In 2008, the federal government paid the massive US $ 430 billion in pure interest from its current debt.

It does not look favorably on the future of the United States, if we look at its debt obligations in isolation. its toll on the American sense of self-esteem, which the United States has known for many decades as the world’s strongest economy. A title that they could eventually go to countries like China, Brazil and Japan charging forward without looking back.