Within the past decade, America has fallen from the top of the Mount Everest into the Marianas Trench of debt. We have gone from the largest creditor nation to the largest debtor nation within only six years. It is surprising that, even with this mountainous debt, our economy is rolling through the longest peacetime economic expansion in U.S. history. How can the U.S. government continue to borrow hundreds of billions of dollars every year without affecting the economy? The truth is that it can not. The present relationship between the U.S. deficits and the U.S. economy is like the race between the tortoise and the hare. The U.S. economy has managed to stay ahead of the reces sion, but unless the government changes its attitude, the deficits will catch us and plunge us into a recession. In general, deficits and debts are not always detrimental, but the present sizes of the U.S. deficit and debt are extremely dangerous. If nothing is done to curb the enormous deficits, a major recession is imminent.
The U.S. federal debt is three times as large as the 1979 debt of $827 billion aNd stands at more than $2.4 trillion. This multi-trillion dollar debt grew from enormous federal budget deficits which, at their peak, averaged $200 billion per year between 1983 and 1986. In 1988, the government had to borrow $155 billion to keep itself running in November and December. In 1987, the cost of the debt in terms of interest was $195 billion.
The U.S. ratio between the debt and the Gross National Product (GNP - the value of the goods and services produced in one year) a popular measure of the relative burden of a deb, is higher than that of every third-world Latin American country. We now not only have a greater absolute debt but also a greater relative debt than Brazil, Mexico, and Argentina. If you assume there are about 250 million people in the U.S. the federal debt translates into a debt of $9,600 per person. Imagine all U....