What is the US national debt

in #economics8 years ago

According to the Treasury department the national debt as of Aug 16 2016 is $19,421,791,184,792.65!! Holy Schnikes That is a big number. But this is the interesting part 226 years ago the national debt was $71,060,508.50 yep when the country started our debt was $71M. Looking at this mathematically assuming compounding interest on just that initial debt.

Pe^rt=F

$71,060,508.50e^r(226)=$19,421,791,184,792.65

The rate of interest is roughly 3.5%. Of course this is a huge simplification and their have been many surpluses and deficits over the years. In fact the minimum debt was in 1835 when Andrew Jackson sold off the second national bank and returned the proceeds to the treasury; that year the debt was $33,733.05. Yep the guy on the $20 bill...well for now soon to be replaced by Harriet Tubman.

Most of the national debt has come from our history of wars. Some economist claim that war stimulates a fledgling economy the cost is to the government that needs to issue bonds to pay for the bombs and bullets. If you’re interested in learning more about the US treasury and the history of the US debt check out this website.
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo1.htm

I’m not really trying to make a point here. The debt is a huge number but it has really always been there growing at roughly 3.5% per year for the last 226 years. I’m interested in hearing what you all think.
Is this a problem that can be solved?
Does it need to be solved?
Is it even a problem?
Please correct me if my math is wrong, please remember I am aware that I vastly simplified the problem.
Mostly I found it interesting I hope you do too.
Looking forward to your comments!

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It's a debt trap. If I create $10 and lend them to you but I want $11 back. You can never repay me because only $10 were ever created. That means that I'll to create more $ and you will be in debt forever.

Considering the USD is based on the credit worthiness and borrowing capability of The Federal Reserve, I would assume it's all going to plan.

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