Essay on How Debt Affects Americans

Many United States' citizens are unaware of the country's current financial state. Many assume that one of the world's wealthiest countries could never be in debt. This is untrue however, and, in fact, the country with the greatest income per capita is in major debt. This study will examine possible solutions to reducing the United States' national budget deficit.

Some has likened the United States current debt problems as the “Titanic.” A foreboding doom that will affect every citizen in America. One may ask about where and who this problem started with, one will probably obtain different answers. Currently, the United States credit is maxed out and credit rating could be affected even if payments continues to be made. It has also been said by the president that even Social Security and Medicare recipients may not obtain their money if the two August deadline is not met to raise the debt ceiling. Tough choices

The United States national debt is large. The U.S. Debt-to-GDP ratio has grown to over 60 percent in recent years. We are more than $15 trillion in debt. In this paper I will address the federal budget, the United States debt, and the resulting impacts on society in several sectors.

We hear about the debt almost every day: news talks about it, politicians argue about it, even President Obama gives speeches on it. So what is the significance behind it? In this article I am going to explain briefly what the national debt is, how big it is, and what it has to do with us.

In his Op-Ed article “The Culture of Debt”, David Brooks, an Op-Ed columnist for The New York Times, sheds light on the bigger picture of debt in the nation today and compares three major theories surrounding the question of who is to blame for Diane McLeod’s plummet into indebtedness.

Did you know that the government of the United States is 19.5 Trillion dollars in Federal debt? That’s an estimate of $55,700 of Federal debt for each man, woman and child in the country. Now because kids don’t pay taxes, the number is even higher, around $60,000 or more. But, what is it then that makes men, corporations and even entire nations to fall into this wretched hole called debt. That is what I will try explain some of the mistakes we commit the lead us into what seems an everlasting debt. I will look into a small amount of degree of some of the actions that get people into debt, such as credit cards and student loans.

Student debt is a major issue, especially in the United States. It often impacts on a student education. Mostly, students from middle class family suffer from it. In the United States, the cost of tuition fee is very high, which is the most common reason behind student debt. Though there are various scholarships and federal aids for the students to help with tuition fees, most of the universities and colleges don’t cover full amount of the tuition fees, which leads the students to take loans, which causes student debt. However, there are also difference between universities and the loan system. Federal colleges and universities often have affordable tuition fees, which often don’t require students to take loans. However, tuition fees of private colleges and universities are extremely high, which don’t only require students take loans, but sometimes, the loans are even sufficient to cover all the tuition fees. Moving to the loan system, there are two types of loans; loans with interest and loans without interest. Loans without interest are usually better and affordable to take, but loans with interest are very expensive and not affordable to pay at all. And often, loan with interest is what leads to the student debt. After all, high tuition fees and loans with high interest are the reasons behind student debt and the problems with student debt are enormous. More or less, every one of the problems with student debt impacts on student education, which then impacts on a student

America’s debt is spiraling out of control due to a lack of jobs and people spending more than they make. America has been in debt since before it was even a country! This debt will grow worse as a recent study has shown that 77% of small businesses don’t plan on hiring more workers. Personal debt is growing just as fast as the national debt, one out of every seven Americans has at least 10 credit cards which creates even more debt. Many Government agencies have started to lose money too.

My own financial health resonates well with the above quote from Daly and Farley, not because I’ve thought about money, but because I know nothing about it. As a young student still breaking ties from home, I have to navigate the intricate world credit, lease contracts, financial aid, and investments seemingly to no avail. In his chapter titled “Enough Debt,” Dietz alludes to this complex world that is the American financial system that I and every other American are currently dealing with. With any complex system, there are misconceptions tied to it that can provide a simpler understanding to those analyzing it. Dietz provides three of the most prevalent misconceptions, how their true function actually debunks them, and then systemic changes

In today’s hectic world of politics there are many talking points and issues that require attention. National debt has been a key issue in the past that has gotten a lot of attention of the public and in the general elections. National Debt or Federal deficit is the total amount of money the government has borrowed from any source. The national debt in the United States is currently $15,236,332,233,848.35 and growing. The national debt per U.S citizen is about $48,852.95. These numbers are made up of public debt and Intergovernmental Holdings. Over the past 50 years national debt has increased exponentially. The national debt of the United States is very important to the US economy because the U.S has the biggest economy and is a major world super power. Issues such as National debt stir up public interest and gain a lot of attention because it affects the job market and peoples investment. There are many causes and effects to the increase of the national debt and there are different opinions and ideas on how to resolve this issue.

If the United States does not find a way to manage its debt, or find a way to reduce the debt, it would increase the cost of finance for business because of the increase in interest rates. This could lead to high inflation. The stock market would also suffer badly as investors might feel that investing in the US market was too risky. This would cause the stock markets to fall as investors would take their money to other countries, or invest in gold; which many people have

Another reason for the “debt crisis” is the increasing expanses that cannot be avoided. These include health care costs which keep on increasing every year hence making the individuals to contribute more of their pays towards this. Due to this reason, the interest rates rise hence affecting the economy as a whole. Government also has to pay for other services which include the homeland security, the national defense and the energy that is required for the society, therefore this contributes towards more spending and lesser revenue. It has been estimated that by the year 2020, the interest on debt will rise to $ 1 trillion. This money that is spent is not for the buying of any goods

Studies have shown that the overwhelming majority of Americans lacks proper skills to manage their finances. And the distribution of those Americans skews heavily to the lower income population. According to a St. Louis Federal Reserve research, US household debt to GDP in 2014 was as high as 79%. And household debt as a percentage of disposable income looks even bleaker, with the 2013 number being over 102%. This means, in 2013, an average American borrowed over 102 dollars for every 100 dollars he or she made. Further exacerbating the situation is the rapidly growing income inequality that created a long-term systematic threat to social stability.

In today’s society, the national debt is a hot topic. Many, like myself, view the national debt as a problem. However, though some oppose the national debt in words, their actions indicate otherwise. To illustrate, statistics show that the national debt has jumped from “$925 billion in 1982 to almost $14.4 trillion in 2017” (Benjamin 701). I truly believe the national debt to be a hinderance to America with significant side effects.

The definition of debt in the dictionary is, “something that is owed or that one is bound to pay to or perform for another” (Merriam-Webster). In the situation of financial stress, debt is owing significant amount of money to an organization or individual. In the United States economy, People can borrow money to pay for needs they cannot afford. This is usually for having a shelter in the form of a house or obtaining transportation in the