Country’s debt level is risky business
Re: Letter, “Our country’s invisible problem (Part 2)”, T&V Oct. 20
To the Editor,
The number one issue in our country is the amount of our national debt, as candidate Robert Ardini has written in your paper. The current low interest rates have hidden this problem from the people.
Usually, when there is a major increase in the amount of the national debt, there is also a major increase in the total interest cost of that debt. This increased interest cost pushes other expenditures out the federal budget, which hurts our economy and our quality of life.
The latest data readily available (through 2014 on Wikipedia) shows how lower interest rates have enabled the Obama Administration to escape this usual penalty for issuing more debt. For fiscal 2007, our national debt was $9 trillion, and the interest cost of that debt was $430 billion. In the next seven years (through 2014), our national debt nearly doubled to $17.8 trillion. During this period of sharply rising debt, interest rates declined. The debt nearly doubled, but the interest cost only increased 0.2 percent (from $430 billion to $430.8 billion). This was possible, because the average interest cost of the national debt fell from 4.77 percent in 2007 to 2.42 percent in 2014.
By July of this year, the national debt had increased to $19.4 trillion. It is now at $20 trillion. A one percent increase in the interest rate on this debt would raise the interest cost by $200 billion. If the interest cost returned to the 2007 level the interest cost of our $20 trillion of debt would be $954 billion. If it returned to the 2000 level, the cost would be $1.3 trillion.
To put this in perspective, the whole federal budget for last year was $3.8 trillion.
In the corporate world, when a company’s debt gets high in relation to its assets or the interest cost of that debt gets high in relation to the company’s earnings, the debt markets view the company’s debt as a higher risk investment. Because of this higher risk, the markets require the company to pay higher interest rates when it issues debt.
Countries and states are no different. When a country’s debt gets high in relation to its Gross Domestic Product, or when the interest cost of its debt absorbs a high percent of its budget, the debt market sees that country as a higher risk and demands a higher interest rate to buy that country’s debt.
Our high national debt makes our nation, our economy and our quality of life seriously vulnerable.
Increases in our national debt will make us even more vulnerable.
Floyd Smith, PCV
Why Donald Trump was elected
The fact that Clinton won in the urban areas and Trump took the rural and midland areas shows the division of America and the rage of ordinary people, in general, against the powers that be, are and have been… for the past several years.
Some would say those who voted for Trump were unsophisticated, anti this and anti that, but I believe they were just fed up with Washington, the Clintons and all that those groups stand for.
I, personally, would rather have a crude businessman, with a big mouth and bigger ego, who is smart enough to bring to his cabinet and inner circle of knowledgeable people who are specialists in their fields, or at least have had years of experience in their particular milieu. In my mind (and obviously the minds of the many who voted for Trump), this is much better than a continual reign of paid off politicians (some who are already in jail), a president who knew the answers before the questions were asked, political hacks, special interest groups and the people who have done favors and now need to be paid back.
The personality differences between Clinton and Trump are enormous: Hillary Clinton is for Hillary Clinton and Trump is for the people and business, big and small. Mrs. Clinton “stood by her man” through his many peccadillos, not because she loved him so much or had such a strong sense of loyalty, or was so symbiotically tied up with a flagrant cheater, but because she thought this was her path to the White House and to become that historical world icon… the first female president of the United States! If she allowed herself to be the female edition of a cuckold by her husband, how then will she stand up to the heads of other countries, primarily male?
She’s had a number of cell phones, smartphones, iPhones, iPads and BlackBerrys, not for the reasons she stated publicly while being questioned (carrying one phone, to make it easier for her to track her private life and appointments, rather than carrying several), but to hoodwink the people and the government by sending and receiving sensitive texts and e-mails, putting our country and our people at risk. And let’s not forget Benghazi!
Clinton has been in government for 30 years. She should have known the many lies she has told would come back to haunt her: the $21.5 million she is worth belies the story she told of being poverty stricken upon leaving the White House (when most of the furniture the Clintons had stolen had to be returned); Hillary Clinton is a brilliant, diabolical woman.
Not to be crude, but comparing the Clintons to the Trumps, I must mention one more thing. As outrageous and outspoken as Mr. Trump sometimes is, I sincerely doubt that he would be coarse enough, stupid enough to get a b–w-job under the historical desk in the Oval Office.
On the other hand, Donald Trump is a publicity seeking narcissist, whose ego is sooo big, he hopes to become the greatest president of the greatest country and will do everything in his power to gain that title. And that’s how we all will win.
Barbara Zapson, PCV