National debt spikes to $31 trillion, but we can stop it before it nears the abyss
by Stephen Moore (Reuters)
January 11, 2019
As I have written over a hundred posts on the current state of the US economy, and particularly on the so-called “economic revival” of the past year, the best way to avoid missing a beat in this long-running train of economic “recovery” is to remember the words of FDR’s New Deal predecessor, Thomas Corcoran. In his classic 1946 book titled “Why America Is Set For Disaster”, Corcoran wrote about the Depression of the 1930s, in which the US economy is currently in a similar condition. In fact, Corcoran warned that if we fail to put a stop to the destructive rise in long term interest rates and the resulting “run on the bank”, by the end of his life, the United States would have a national debt of over 31 trillion dollars!
As of this writing, the US national debt stands at $19.4 trillion dollars, with $9.0 trillion in debt from the federal government and $8.5 trillion coming from the states and local governments. At the current pace of increase in the national debt, we would likely exceed the 31 trillion dollar mark before the end of this decade. If this happened, the federal government would have to borrow a net $51 trillion, even after spending $2.5 trillion on the debt, in order to pay back the interest on that new $9.0 trillion in debt.
If that were to happen, the nation would quickly descend into disaster. According to an August 2018 study by two professors at the University of Massachusetts, a 30 percent spike in interest rates would cause the national debt to triple in just 5 years — from around $20 trillion in 2005 to around $44 trillion in 2019 — and by 2030, it