Chances are you haven't heard the Presidential candidates in either party talking a lot about the national debt. It tends to get overshadowed by immigration, healthcare, and other economic issues.
Yet this issue affects every consumer, particularity Millennials.
The U.S. government must borrow increasing amounts of money each year to pay its bills. The national debt, in terms of that borrowing, is growing exponentially. Worse still, unfunded mandates, such as Social Security payments and government pensions, push that total much higher.
According to the Treasury Department, the national debt more than doubled between 2007 and 2015. The numbers are so large it's hard to even comprehend.
It might surprise you to learn that the United States has carried a national debt every year of its existence, except for one. In 1790 the U.S. government owed $70 million, a hefty sum in those days. It ran up the debt paying off the states' Revolutionary War debts.
In debt every year but one
Andrew Jackson, who hated debt, was elected President in 1828 and made it his mission to pay down the debt. He sold off U.S. government land during a land speculation boom and by 1835, the U.S. was debt-free.
However, it didn't last. Jackson left office and the land speculation bubble popped in 1837, ushering in a big depression. The government was back to borrowing again. And even when borrowing increased during wars, it was generally manageable because the country's economy was growing.
Think of it like a young couple's home mortgage. When they first buy a home, the mortgage payment takes a big bite out of their income. But as they get older and make more money, the debt is less of a burden.
Even during times of prosperity, the U.S. government didn't attempt to pay off the debt – it simply maintained it, spending about what it collected in revenue each year. During those years, it built the Interstate Highway System, launched the Space Program, and began new entitlement programs.
Borrowing to pay the bills
The issue that worries some economists today is that the U.S. government must borrow just to pay its bills. The economic growth that would make the burden of increasing debt easier to bear just hasn't been there since the financial crisis.
Either taxes must rise, spending must decrease, or a balance must be struck between the two. However the political process has been unable to even approach a solution.
There are, in fact, two sides to the debate. Some economists say a rising debt is preferable to harming the economy with large tax hikes or by slashing government spending.
Deficit “hawks” worry that interest on the debt is rising to the point that it competes with other expenses. Even the Congressional Budget Office points out that increasing interest payments will compete with other needs if the economy doesn't start growing again, or should interest rates spike. And it will be largely up to today's young people to deal with it.
In the 1992 Presidential election, third-party candidate Ross Perot captured public attention with his hand-drawn charts showing an exploding deficit. At the time, the national debt and yearly deficit was a good bit smaller.
Since then, we haven't heard much about deficits or debt in Presidential campaigns.