America is about 16.7 trillion dollars in debt. That is an amount of money so astronomical that it is hard to imagine. However, if the debt ceiling is not raised for the 43rd time since 1980, the government may default on its bond payments. If the single largest creditor in the world, the one with more debt than the entire European Union combined defaults, it could be a disaster. However, it is doubtful that that will happen. It is considered by most analysts that the debt ceiling will be raised again. However, we cannot leave out the possibility that it might happen, as, traditionally, the joke in politics has been that congress and deadlines are two things that should not be mixed. At the White House Press Dinner the President said that he proposed a toast at a dinner with some congressmen, but it died in committee.
America has had a long history of being in debt, stretching to its founding. The Continental Congress, during the Revolutionary War, printed so much paper money that it became so worthless that a phrase was made “not worth a continental” showing just how much the money was worth. To alleviate the problem, money was borrowed, which only made things worse.
Alexander Hamilton did a rather good job, at least in some areas, of cleaning up the disaster, as first Secretary of the Treasury. However, the nation was still in debt. And we continued to be in debt until the Presidency of Andrew Jackson, the president of the Trail of Tears. He was the only president to ever pay of the entire national debt, and to also shut down the National Bank.
However, his successors got the nation in debt again. It continued from millions to billions to trillions. To demonstrate the numbers, one billion minutes ago it was around one hundred A.D. Our nation is in debt around 160 hundred billion dollars. It has been a few years since we balanced the budget. Currently a fight is going on in Congress over cutting about 70 billion dollars from the budget, which everyone recognizes in not exactly fixing the problem.
Several world leaders have asked America to resolve the crises before Thursday, knowing that if America defaults, it could plunge us into another recession, and the rest of the world would almost certainly follow us down. The JP Morgan financial firm has spent large amounts of money preparing for the possibility of a default.
The default button is not really an option, but neither is the idea of a few trillion more dollars in debt. The interest will continue to climb, until we may, someday, be no longer able to pay that either.
This is what is, by any measurement, bad debt. Such massive fiscal irresponsibility could easily, one day, cause massive, global catastrophe if the largest economy in the world defaults. If the house is not shored up better, it will fall. And if it is not, it will come down. America is the two pillars of the world market.
If the pillars of the world money system collapse, so will the house.
Andrew C. Abbott