Is the burden of the US national debt getting better or worse?

Question

In case this question is too hard, here's another: after borrowing money to put an addition on my house, my mortgage debt has gone up, but the value of my house has gone up MORE. Am I going bankrupt?

sorry nich is does qualify

Debt means nothing not in context of GDP..
After WW-2, publicly held debt was 121% GDP; although the debt level has increased many times over since then, the debt ratio has dropped to 37.5% because of sixty years of economic growth.
currently the deficit is falling and GDP is outpacing interest growth. therefore the math is not in any of yalls favor.

Answer 1

Using your personal example, it all depends.
Has your personal income increased to pay back the debt? If you personal income has gone down and you increase you debt, then you are headed toward a liquidity problem.
A number of other factors are involve in the national debt other than asset value. There are no hard assets backing up the national debt. The only collateral is future earnings from taxes. Future earnings are impossible to predict. Also, future financial obligations are impossible to predict.
Take the current financial worries facing the nation. There is a credit squeeze threatening to shut down the economy. A federal bailout is being planned as we speak. What will be the cost to the federal government. How much more federal debt will be added just to keep expansion at its current level?
A major problem with piling up national debt is that repayment is dependent on an unpredictable private economic market.
Look how fast a budget surplus turned into a budget deficit after the tech bubble bursting 7 years ago. A lot of capital investment was lost then. Much more capital has been lost to the subprime meltdown.
Neither of these events were caused by the government. the private sector managed to screw up on its own. This time around, however, its severe enough for even the Bush administration to believe a federal bailout is needed.

Answer 2

Actually thats a good example and I see your point but it doesn't apply in this case.
If you borrow to improve a property then your right, the value of the property may improve enough to offset the debt and you may have greater capitol then you started with. When our country borrows to cover a tax break and the tax break allows greater investment then our country should gain value, but your forgetting something.
War.
We are spending billions on war and while some industry does benefit from this, not enough to off set the cost. Look at history and you will see numerous examples of countries bankrupted by war time spending.
Many people attribute the end of our depression on world war 2. Its true that industry was bigger then ever but the main buyer for that industry was us. What saved us was that after the war was over we had the most INTACT industry and we gained market share quickly because our previous competitors were rebuilding and unable to supply the markets demands. We stayed ahead for years but now our old competition is back on its feet.
The war alone would not break us but combined with the tax break what is happening is we are spending at an increased rate and taking less revenue. Cut spending AND cut taxes and you would be right. The reinvestment would pay off. Increase spending while cutting taxes and we get increased debt without equal benefit.

Answer 3

The national debt is getting WORSE and we can blame Bush for alot of it. The national government, the first year Bush was in office, took in less money while spending more money than the year before. We can barely pay the INTEREST on our debt, which totals almost 500 billion dollars. This spending takes up a fifth of all yearly spending, and the government is having to take out more loans each year. Keep in mind, this is just the interest we are paying, not the debt itself. The value of the American dollar is quickly declining compared to other currencies... Anyone else fear another Great Depression?

Answer 4

Our debt is approximately sixty 5% of our GDP. that's kindof undesirable, yet that's no longer out of control. For assessment's sake, Canada is at approximately sixty 5%, China - 22%, uk - 40 3%, India - 60%, and so on. the sorrowful area is that our united states of america is probably no longer in a disaster era. Indebtedness might desire to be stored for disaster sessions, like WWII. And opposite to how human beings act immediately, terrorism isn't at a disaster point, IMO. i'm merely nerve-racking we would have a actual nationwide emergency sometime and we will locate we've too lots debt to commence with.

Answer 5

Exceptionally bad timing on your question. The national debt projection has just been released and in the Bush Presidency it has increased from 5.7 Trillion to 10 Trillion.
Combined with Foreclosures and Mortgage loan crisis, falling dollar, and rising interest - we are in BAD shape.

Yeah right - Debt means nothing...until interest rates climb.

Answer 6

it is getting much WORSE!!! the US has already spent well over 1 trillion on Iraq, plus all the lost benefits if the money was invested wisely. The money could be used to convert all vehicles on the roads to use ethanol, which will mean ZERO import of oil. Plus in 20 years the Medicare and Social Security will run out of cash and go banktupt.

Answer 7

It's getting much worse. Bush as almost doubled the National Debt in seven years. The US hasn't gained anything of value from the debt.

Answer 8

worse

question - the debt has gone into outer space because of a war being fought based on made up lies. The price of gas is now in outer space as a result, am I going bankrupt?

Answer 9

Digging a debt hole to pay for a war, etc hardly compares to adding value with an addition to your house, but even keeping with that rather bad analogy, you have less money to pay for things like your power bill, cable bill, telephone service, recreation, and so on.

Answer 10

The national is growing a 1 million dollars per MINUTE.

You go bankrupt if you cannot pay your bills, irrespective of the increase of the value of your house.