Living on immense amounts of borrowed money

February 13, 2012 | By | Reply More

According to this article in Yahoo News, President Obama unveiled a $3.8 trillion budget request Monday that hikes taxes on the rich, spends new money on infrastructure and education, but does little to reform the entitlement programs that pose the biggest long-term threat to the federal budget.  According to the article, this proposed budget “forecasts a deficit for fiscal year 2012 that will top $1.3 trillion, before falling in 2013 to $901 billion, or 5.5% of gross domestic product.”

If I’m understanding this correctly, this means that 34% of what the United States spends is borrowed or created out of thin air.  I’m not an economist, but this sounds incredibly reckless and unsustainable.   My “solution” to this perceived problem is to not think about this issue much, and hope that not too many are hurt too badly.  I wish I could understand how a huge country like the United States could, year after year, for decades, run massive deficits.  I’m assuming that running these deficits causes damage to our economy and our national interests, but what do I know?


Category: Economy

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

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