The National Debt: Serious Problem or Natural Occurrence?
Many people today do not know much about the national debt. Such ignorance has resulted in the questions "So if it is our debt, we owe it to ourselves, right? Why not just cancel it?" or "We owe it to ourselves, so isn't it no big deal if debt goes up?" Well actually it is not that simple. The money owed from the National Debt isn't just from Americans. 42% of the debt is from foreign investors; 37% of that 42% is owed to Japan. Besides, even if it was 100% American owed, we just can't cancel the debt. That would be like going to the bank, taking out 100,000 dollars, and then telling the bank that you're 'canceling' the debt. Millions of American investors are owed money, and the answer to the debt problem won't be that simple.
In 1790, when Alexander Hamilton, as secretary of the treasury, made his first report on the national debt of the United States, he estimated it at close to $70 million. After alternately rising and falling, the debt stood at only $4 million, or 21 cents per capita, in 1840 (Debt, National). That was the lowest point ever reached by the public debt of the U.S. While the debt is constantly changing, the estimated value of the deficit today falls somewhere between 7.41 and 7.42 trillion dollars. That is approximately $20,000-$30,000 per person in America, including those still in diapers. The government owns approximately 42% of the debt; the rest is public owned through bills, notes and bonds (Summary). Historically, these loans have been undertaken to raise money for wars and national defense and to finance public works. More recently, though, governments have taken loans to meet national budgets or expenses that are not covered by their revenue, or to seek to improve economic conditions by counteracting unemployment or depressions. The National Debt is the result of "a state's borrowing from its population, from foreign governments, or from international institutions such as the International Bank for Reconstruction and Development" (Debt, National).
Some people believe the National Debt to be "an inescapable vacuum in the pockets of taxpayers." "Even if you don't feel personally responsible for your share of this debt obligation, the immediate impact on you of this much debt is interest payments from your taxes. As long as there is debt there will be interest payments!" (It's the Debt) Some plans have been thought up to solve the National Debt problem. "One option emphasizes spending cuts and leads to a smaller government. A second relies on tax increases and leads to bigger government. The third maintains government's current size, but makes it more effective, and contains a mix of spending reductions and tax increases, sufficient to achieve balance in ten years while preserving room for some high-priority new initiatives" (2004 Platform). While all are somewhat plausible ideas, they are and most likely remain just that: ideas. No firm action has been made that...