Debt

The amount of debt the country is building is setting new records all the time, and worse is that the rate of growth is increasing due to the tax cuts and the increased spending.

Further, the low interest rates we have been experiencing are showing signs of increasing and if they do the amount required to service the debt will also increase.

Can the country afford it?

Well the simple answer is no.

The more complicated answer is still no, but we can party till the bills come due.

A basic rule of finances is you don't borrow to pay for current expenses, you borrow for extraordinary items, like a house, a car, or an education.  If you have to borrow to buy milk, you probably have a problem.  If your ordinary budget simply doesn't cover your regular expenses you definitely do.

The US budget doesn't cover its expenses.

Part of the problem is that we have to pay over $300 billion just to cover the interest on the debt we already have.  We run a deficit of nearly $1 trillion so a third of that is for the interest.

That's a little bit like paying your credit cards with new credit cards.

Its actually a lot like that.

With the deficit and debt growing a relatively minor change in the interest rate is significant.

There is no real solution being proposed and the only real ones would be increased taxes or reduced spending.

Enjoy it while you can.