In 2017, the US Economy is seen as healthy. Unemployment is at 4.1% and businesses are reporting strong profits. However, we have a deficit of $600 billion dollars. If we have a deficit when the economy is healthy, then what will we have when the economy is weak? Stands to be a greater deficit, such as of $1 trillion dollars.
These numbers are large, but any number negative is understandable. It is money that we spend now that we must pay back later, plus interest. The only way anyone can be loaned money, a country or individual included, is that there is a guarantee that it will be paid back. The US has always paid back its debt. But is the guarantee good forever?
Consider that the US is not a individual but a political entity. Like a business, it doesn’t exist but as a name on a piece of paper. US citizens are under no obligation to pay back the debt owed. They can simply elect politicians who vote to not make debt payments. Or, as a country, we may simply bounce the check. Either way, there is no political, military, or other force put in place to force a country to make debt payments.
The consequence are terrible. The US dollar will lose value and we will go into depression. Indeed, the rest of the world will follow suit. The economy would be devastated.
That is why we need to reign in spending. Any business or household will tell you, it needs to have a balanced budget. And it fat years it saves and in lean years it spends. It simply makes sense to do it that way.
But Americans do not make the hard choice to make sacrifices now to balance the budget.