The average American is about $100,000 in debt, adding up to a total US consumer debt of a whopping $17.1 trillion.
However, that immense number is only half of the US government’s total debt of $34 trillion. Realistically, the nation has always been in debt, but it’s getting worse. Famous businessman Warren Buffett said that he has an idea that will undoubtedly get the country out of debt in no time, but Congress will never let it happen.
Understanding the National Debt
The national debt is defined as the total amount of money that a country’s government has borrowed and owes to its creditors. The USA has had debt since its inception, but today, it’s worse than ever before.
Forty years ago, the US national debt was about $907 billion, but as of April 2024, it’s now more than $34.5 trillion. At this point, many financial experts worry that the country is on an unsustainable path that it may never be able to come back from.
Who Does the US Owe Money To?
It can be extremely challenging to even imagine how much $34 trillion dollars is; one could explain it as 34 million million, but for the vast majority of people, that number is essentially unfathomable.
These kinds of loans aren’t given by banks, but by other countries’ governments. Specifically, the US owes trillions to Japan, and billions to China, the United Kingdom, and Belgium.
How Can the US Get Out of Such Extreme Debt?
Anyone with their own debt understands just how hard it is to get out of it. From interest payments to surprise bills, even paying off $100,000 can feel nearly impossible. The US government’s financial situation is no different; they still have to pay interest and have new costs every year that require their immediate attention.
So, right now as the national debt continues to rise every year, the vast majority of financial experts are wondering how the US will ever get out of this gigantic hole they’ve dug.
Warren Buffett Has a Suggestion
Warren Buffett has long been considered one of the most successful investors of all time. Buffett started investing right out of college in the 1960s with his limited amount of personal wealth. Over the next few decades, he made himself more than $137 billion and is now the 9th richest person in the world.
In 2011, the famous multi-billionaire told CNBC that he had a foolproof plan to rid the US government of its debt once and for all. Buffett said that a law which incentivized Congress to better manage the country’s finances would do the trick.
Buffett’s Exact Words
Buffett said in the interview, “I could end the deficit in five minutes. You just pass a law that says that any time there’s a deficit of more than three percent of GDP, all sitting members of Congress are ineligible for re-election.”
Although Buffett was laughing while he explained his idea, he is certainly making a valid point. With no accountability, why would anyone in government actually care about the country’s growing debt?
The National Debt Is Only Going Up
Buffett’s suggestion was recorded nearly 14 years ago, and since then absolutely nothing has been done to curtail the government’s spending. In fact, they are deeper in deficit than ever before.
Financial experts say that the national debt will increase from $34 trillion to an almost unbelievable $54 trillion over the next ten years. If this hypothesis comes to fruition, the United States will struggle to stay afloat.
Why Is No One Accountable for the US National Debt?
When the average person is severely in debt, they often reach out for help from a financial advisor to find out how to get out of it. But the US government doesn’t seem to be making any moves towards minimizing it’s egregious national debt.
While Buffett’s suggestion to make the members of Congress responsible was said as more of an allegory than a real plan, it does spark the question: Why isn’t anyone accountable for national debt?
Is There Anything Americans Can Do to Minimize the National Debt?
It’s important to understand that the personal debt of Americans is in no way related to the national debt. So paying off one’s debt won’t make a difference to the government’s growing deficit, but that doesn’t mean there’s nothing the average American can do to help.
As with all political problems, what Americans have and will always have is their vote. By supporting and voting for political leaders who are focused on cutting back on government spending and paying off this almost ridiculous debt, Americans can make a difference.
How Does the National Debt Affect the Average Citizen?
Unfortunately, any Americans don’t vote in political candidates based on their stance on national spending because they don’t realize just how much a growing national debt affects their everyday lives.
However, there are many ways in which it does. First, rising national debt means fewer economic benefits for Americans; it reduces business investments, decreases economic growth, and even raises inflation rates. Additionally, as the government has to spend any money that it does have to pay off foreign debts, it has less to spend on infrastructure, education, and public investments.
Do as They Say, Not as They Do
There’s no doubt that the US has created a culture of debt. The government is drowning in it, big banks have had to be bailed out, corporations are trillions in debt, and even the average American has at least $104,215 worth.
But Warren Buffett warned in the interview that Americans, those leading its banks and corporations and even regular citizens, need to do their best to practice fiscal responsibility, even if they’re government doesn’t.
Americans Must BeHopeful for Change
Sometimes it feels as though Americans can’t do anything to change their own government. But Warren argues that’s simply not true.
Change can truly come from the ground up, and through financial responsibility and voting in politicians who practice the same, Americans may be able to make a real difference in the national debt.
