According to USdebtclock.org, the United States currently has $28,521,118,904,217 being accounted for in our national debt. I have a tough time reading a number that is so fantastically large, but I believe that is 28.5 trillion dollars. As Donald Trump won his election in 2016, that number was just over $18 trillion. Being that August 8 just happens to be National Dollar Day, I wanted to address some concerns that I have been hearing a lot of recently regarding our pending doom, and the eventual decline of the dollar.
Concerns about our debt and the value of our dollar decreasing are definitely legitimate. Our leaders have not been the best stewards of our great country’s taxpayer dollar and continue to make very questionable decisions in regard to spending. They used to at least pretend that they cared about fiscal responsibility; but ever since we went off the gold standard in 1971, we have had a license to print money – and print we have.
The good news is that we aren’t the only country living far beyond the tax revenues that are being generated. The global pandemic brought about by COVID-19 had a very negative effect on a worldwide basis, causing almost all of the central banking system to issue stimulus and countries to borrow money at an alarming rate. When we look at the United States through a lens of our performance in relation to the rest of the developed world, we have actually not moved very much in terms of our debt-to-GDP ratio. Essentially, that ratio is the amount of debt we are carrying compared to how much we do in annual national sales. When we look at the worldwide debt-to-GDP ratios, we see that we are very much in line with our competitors (1):
- Japan 257%
- Greece 213%
- Canada 117%
- England 103%
- United States 129%
So, even though our debt is very high in terms of total numbers, our dollar has been able to maintain its value because everyone had to use extreme levels of debt to survive this crisis. I still believe, all things considered, that the U.S. is still the best house in a bad neighborhood when it comes to our currency. When I look back at our past debt-to-GDP ratio to compare ourselves on a relative basis, we often see spikes in our debt-to-GDP ratio during times of crisis. In 1940, our ratio was at 42%; but after we entered WWII, we were at 118% by 1946. In 2000, we were at 55% debt-to-GDP, but by 2010 we were back to 90%(2).
I’m saying all this to encourage you to not listen to all the doom and gloom that has been so prevalent in the news of late. Typically, the people pushing this agenda are trying to sell you something – like gold, or silver or property. The financial world will only end once … I’m sure people in 1946 were feeling the same way many are today. Remember that we are America and so far, we’ve always bounced back.
1. worldpopulationreview.com/countries/countries-by-national-debt
2. thebalance.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287
