B2IshaniResearchNotebook

Peterson, Micheal. “Our $23 Trillion National Debt: An Inter-Generational Injustice.” George W. Bush Presidential Center, 21 Nov. 2022, https://www.bushcenter.org/catalyst/federal-debt/peterson-national-debt-an-inter-generational-injustice. 

Direct Quote: And let’s not forget the pain of compounding interest. If you keep borrowing more and more every year, your debt balance grows, and you have to borrow to pay interest on the interest. As a result of this vicious cycle, interest has become the fastest growing federal “program.” In fact, this year the federal government will spend $1 billion on interest – every single day. Over the next 10 years, interest costs will total a staggering $6 trillion. And the long-term path is even worse: Absent change, these already massive interest costs will double every 10 years.

Summary/My Interpretation: One of the most problematic characteristics of the national debt is its compounding nature. Specifically, securities are more attractive to consumers when they hold the promise of increasing in value. This has led the US to issue bonds at higher interest rates in order to encourage consumption. Overall, this has led experts to worry as the interest rates associated with the newly issued bonds would take a heavy economic toll on the government. 

How I Plan To Use This In My Project: As a whole, this article does a good job at explaining the threat that compounding interest rates can have on the economy. I want to use the quantifications given in this article as a call to urgency for my readers. Specifically, I want to push the narrative that if the debt is not solved in the near future, it may take a massive toll on the economy. 

Peterson, Micheal. “Our $23 Trillion National Debt: An Inter-Generational Injustice.” George W. Bush Presidential Center, 21 Nov. 2022, https://www.bushcenter.org/catalyst/federal-debt/peterson-national-debt-an-inter-generational-injustice. 

Direct Quote: America’s population is aging and living longer. More than 10,000 people will turn 65 every day for the next 30 years. The total number of people over age 65 will increase by an astonishing 50 percent over the next 30 years. And older Americans are living much longer. When Social Security was founded in 1935, life expectancy was 62 years. Today, life expectancy has grown to nearly 79 years. While that’s great news, it also means that American seniors will spend many more years in retirement than we originally planned for.

Summary/My Interpretation: As the US continues to move from development phase 3 to 4, it finds itself with a population that has steadily been increasing in age. Overall, this has been proven to be problematic for several reasons. Specifically, since large numbers of people retire each year, the US finds itself struggling to provide social security to all of them. In fact, this becomes increasingly worrisome since the debt continues to remain unchecked, meaning that social security can not continue to be invested at the same rate. Overall, if the debt is not reeled in, the US may find itself unable to meet its citizens’ demand for social security. 

How I Plan To Use This in My Project: In my previous research, I proved the inverse relationship that exists between the national debt and funding for social security. I plan to use this article to not only further this narrative but also demonstrate why maintaining social security should be a priority. At the point where the US population is aging, there is going to be an increasing amount of strain on the social security system that will be exacerbated by the ballooning debt.

McCarthy, Niall, and Felix Richter. “Infographic: U.S. National Debt Is Growing Rapidly.” Statista Infographics, 27 Aug. 2019, https://www.statista.com/chart/19131/federal-debt-held-by-the-public-as-a-percentage-of-gdp/. 

Graph: 

Summary/My Interpretation: When looking at the graph, it is evident that the debt has spiked whenever there has been a major crisis in the US, such as the onset of a war or a recession. Specifically, the United States has historically maintained economic stability by increasing the national deficit in order to invest in social programs and increase demand in the short run.

How I Plan To Use This In My Project: I want to use this graph in my project to demonstrate the US’ fiscal policy regarding the debt. Specifically, since increasing the debt is one of the best ways to maintain economic stability, it is vital that the US maintains enough cap space to be able to increase this figure when needed. I plan to use this narrative in my paper to demonstrate how in moderate doses, the debt is integral to the economy.

Thornton, Matthew. “A Guide to the Federal Debt Crisis.” The Paper Trail, 6 May 2016, http://www.thepapertrailnews.com/frontpage/dumb-and-dumber-economics-a-middle-school-guide-to-the-federal-debt-crisis/. 

Graph:

Summary/My Interpretation: When looking at the graph, it is evident that the debt as a percent of GDP has been increasing since the Reagan administration. However, the amount this value has increased has looked different under different administrations. In fact, the debt has tended to increase exponentially under republican presidents and has steadied out under democrats. 

How I Plan To Use This In My Project: One of the main goals of my project is to be able to provide an accurate historical overview of the national debt and explain how it got so bad. To do this, I want to look at how the figure evolved under different administrations and what policies were implemented that caused this. Overall, I want to use this graph to demonstrate the tendency of the debt to rise more under Republican presidents. 

Smucker, Lloyed. “When the Balloon Pops: Inflating Our Debt and Undermining Our Security.” The Washington Times, The Washington Times, 17 May 2022, https://www.washingtontimes.com/news/2022/may/17/when-the-balloon-pops-inflating-our-debt-and-under/. 

Direct Quote: Mr. Mullen warned us that our debt would soon reach a point where we spent more paying off interest than funding our military, risking our national security. Under the president’s budget, that warning will be proved true in 2029. Given that China owns an increasing amount of our debt, those interest payments will directly fund the interests of an economic, and perhaps military, adversary.

Summary/My Interpretation: As the debt continues to rise, interest rates on these payments will rise alongside it. This is problematic as it requires an increasing amount of funds every year, leading to the government redirecting funds from other areas to fuel it. Experts believe that a part of the military budget could go to fund this  as it receives the most funding in the status quo. Overall, this would not only take away from the military but also redirect funds to foreign powers. 

How I Plan to Use This In My Project: As a whole, this article does a good job at explaining how national debt can threaten security. Although this could have a possible impact on middle class families, I plan to use this article as a way to explain why selling treasuries to other nations can be harmful. One of the most common arguments against solving the debt is stating that other nations always want to buy treasuries. While this is true, it is important not to oversell these bonds as it could harm security in the future.