IN THIS ISSUE:
1. Overview – US Debt at Record High $21.7 Trillion
2. Debt Held by the Public vs. Intragovernmental Debt
3. The Flimsy Argument For Why Intragovernmental
Debt Shouldn’t be Included in the National Debt
4. National Debt as a Percent of Gross Domestic Product
5. Conclusions: The Real National Debt & Debt-to-GDP Ratio
Overview – US Debt at Record High $21.7 Trillion
Today’s discussion is one I write about every few years because millions of Americans don’t understand that they are being misled by the government and the media about the true size of our national debt. According to the US Debt Clock, our national debt is now in excess of $21.7 trillion, and is expected to rise by over $1 trillion per year over the next decade starting next year.
No nation in the history of the world has ever amassed a national debt remotely this large. Thus, no nation has ever repaid a debt of this size. There is widespread agreement today, and has been for years, that it will be impossible for the US to ever repay this enormous debt, much less the $30+ trillion it will be at in a decade –assuming we make it that far before the next financial crisis.
The bureaucrats in Washington don’t want the public to know the true size of the national debt, so years ago they decided to break it up into two categories: “Debt Held by the Public” and “Intragovernmental Debt.” The government, and in-turn the media, like to quote only the Debt Held by the Public whenever possible, rather than the full national debt.
They actually suggest that the Intragovernmental Debt should not be counted toward the national debt because they say this is debt that “we owe to ourselves.” I’ll explain the differences between the two types of government debt below. I’ll also explain their argument for why Intragovernmental Debt shouldn’t count as part of the total national debt. And I’ll tell you why that argument is utter hogwash!