National Debt Matches Entire Yearly Economic Output
According to many analysts, the United States now faces a debt as big as the nation's entire economic output for a year. That means it would take every American dollar produced in an entire year to just barely pay off the current debt.
"The consequences are grave moving forward because not only is the debt high, but according to the Congressional Budget Office and all the experts who are looking at it, there's no plan in place to change that any time in the near future," Sen. Marco Rubio, R-Fla., said.
A recent report from the Senate Republican Budget Committee states that by 2019, under President Barack Obama's budget the government will be spending more money to pay down interest on the national debt than it will be spending on national defense.
Conservative economic analyst Phil Kerpen told CBN News that a country's gross domestic product has a direct correlation to debt.
The author of Democracy Denied says, "When countries get above 100 percent of GDP they have real difficulty financing their debt, and it tends to precipitate major fiscal challenges."
Leading Tea Party Sen. Jim DeMint, author of Saving America From Economic Collapses, agrees. He says America's current plan not only doubles the country's debt but devalues the American dollar.
"The only thing that makes that dollar valuable is faith that we can pay our debts," DeMint charged.
He added that the rest of the world knows that America is borrowing 43 cents on every dollar it's spending.
Kerpen points to other countries like Europe facing financial upheaval, which helps to make the United States' financial condition look better than it is.
"Europe is in so much worse condition than we are that there's still a big demand for U.S. debt," he explained. "And I don't think we can count on being sort of the least dirty shirt in the hamper, that investors will keep putting us on."
But Demint warns that troubles in Europe could eventually lead to serious ripple effects in the U.S.
"Banks are heavily invested in Europe. If the euro collapses, dominoes could start to fall this year," he said. "And after that starts to happen, people lose confidence in our dollar."
Whether it's a crisis in Europe, or just the constantly growing debt, Kerpen and others warn that at some point the cost of paying back the debt will inevitably increase. Kerpen expects interest rates to sharply increase unless politicians adopt a new fiscal policy.
J.D. Foster, an economist with the Heritage Foundation, served in the Office of Management and Budget under the George W. Bush administration. He says doubt in the U.S. dollar can quickly turn to disaster, like in Portugal where interest rates have soared.
"In Portugal right now, their 10-year Treasury is trading at about 18.7 percent," Foster explained.
Foster says it could cost several hundred billion dollars every year just to pay the interest on the debt, in addition to the debt itself.
And DeMint cautions that, soon, America will have no where to turn.
"We're going to be worse off than Greece because no one can pick us up, no one can bail us out," he claimed.
"Once you're bankrupt, then you can't make your own decisions anymore," DeMint continued. "Other countries are telling you what you have to do. Our creditors will tell us what to do because as we know, the borrower is servant to the lender."
Now, America must decide whether it will be its own master in the future or face financial crisis because politicians couldn't control their spending.