Connect with us

Minnesota

Good Question: How did the U.S. debt get so high?

Published

on

Good Question: How did the U.S. debt get so high?


MINNEAPOLIS — If you wince when look at your monthly credit card bill, you might not believe what the U.S. government has racked up.

The national debt now tops more than $34 trillion. That’s a new record difficult to comprehend — and there are no signs of slowing it down.

How did the debt get so high? And will it need to be paid off? 

Well, that goal might be wishful thinking.

Advertisement

The debt is one of the rare times people have a chance to use the word “trillion” in a sentence without exaggerating some number.

It stands at $34,009,690,055,595 as of Jan. 9. Elon Musk, the world’s richest person, is worth more than $241 billion. You’d need at least 140 of him to equal the debt.

“The first thing is about one-fourth to one-third of it doesn’t count,” said Christopher Phelan, an economics professor at the University of Minnesota. “It’s debt that’s held by another part of the government. So, it would be like the wife owing the husband money. It doesn’t affect the household. But the rest of it is still a huge number.”

MORE NEWS: https://www.cbsnews.com/minnesota/news/new-law-aims-to-crack-down-on-littering-on-lake-ice/

How did the U.S. accrue such a huge debt? One of the main culprits is consistently overspending. When the federal government spends more than its budget, it creates a deficit. In the fiscal year of 2023, it spent about $381 billion more than it collected in revenues.

Advertisement

To pay that deficit, the government borrows money. That can happen by selling marketable securities like treasury bonds. The national debt is the accumulation of the borrowed money, plus interest.

“Right now the federal government is spending 1.5 times as much as its taking in. So, an analogy that I’d like to give is imagine that a couple is making $80,000 between the two of them and spending $120,000 a year,” said Phelan. We asked him if the U.S. is the equivalent of a person who only makes the minimum payments on a credit card. Phelan took it a step further saying, “The U.S. is like somebody who makes less than the minimum payment on their credit card.”

The country was literally built on debt. It was $75 million in the red after the Revolutionary War thanks to loans from investors and countries like France. 

The Civil War led a to a huge spike, raising the debt from $65 million in 1860 to nearly $3 billion in 1865 when the war ended. Costly wars proved to be a theme in our nation’s history. The debt was at $49 billion right before the U.S. entered World War II. When the war ended, it was $260 billion. It began rising at a fast rate in the 1980’s and was accelerated through events like the Iraq Wars and the 2008 Great Recession. Most recently, the debt made another big jump thanks to the pandemic with the federal government spending significantly more than it took in to keep the country running.

MORE NEWS: All-women, racially diverse St. Paul City Council sworn in Tuesday

Advertisement

Who do we owe the money to? “Mostly ourselves,” said Phelan. “A lot of pension funds own government debt, money market funds own government debt and then people own those money market funds.” The U.S. also has debts to other countries.

Where does the money come from that would go towards paying off the debt? It ultimately comes down to the U.S. taxpayers. That means in order to pay it off, or at least make a larger dent in the debt, the federal government would have to raise taxes and cut spending. “The problem is way bigger than if we just cut foreign aid,” said Phelan.

With such a high debt, how does the country function? Phelan said it comes down to the debt to gross domestic product (GDP) ratio. That equation shows a country’s ability to pay down its debt. “This ratio is considered a better indicator of a country’s fiscal situation than just the national debt number because it shows the burden of debt relative to the country’s total economic output and therefore its ability to repay it,” according to the U.S. Treasury’s website. 

The current ratio in the U.S. is about 123 percent as of Sept. 2023. Two decades earlier in 2003, it was down to 60 percet. According to CEIC, the highest the ratio ever reached in the U.S. was 130.6 percent in March 2021, roughly one year into the pandemic.

While the ratio remains high for the country, Phelan said other countries are worse off, yet continue to run. Japan has a debt to GDP ratio that’s well over 200 percent, but that doesn’t mean countries should comfortably operate at those levels for a long time. “There is a limit, and it’s determined by when potential bond buyers say ‘I don’t think I’m gonna get the money back.’ And they demand a huge interest rate for risk of not getting the money back,” said Phelan, adding how that concern hasn’t happened yet for the U.S.

Advertisement



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Minnesota

Shorthanded Clippers can’t keep pace with Anthony Edwards and Minnesota

Published

on

Shorthanded Clippers can’t keep pace with Anthony Edwards and Minnesota


Anthony Edwards scored 31 points, Donte DiVincenzo added 18 and the surging Minnesota Timberwolves beat the Clippers 94-88 on Thursday night.

Jaden McDaniels and Ayo Dosunmu each scored 12 points and Rudy Gobert had 13 rebounds to help the Timberwolves improve to 5-1 since Feb. 9 and 3-1 since the All-Star break.

Edwards, returning to the site of the All-Star Game, where he was the MVP, was 12 for 24 from the floor and sealed the victory with a step-back three-pointer over two defenders for a 92-88 lead with 42.9 seconds left.

Advertisement

Minnesota improved to 2-0 on a three-game trip.

Derrick Jones Jr. scored 18 points and Bennedict Mathurin added 14 for the Clippers, who struggled from the outset with a season-low 38 points in the first half. Kris Dunn had 11 points for the Clippers (27-31), who have lost three consecutive games for the first time since December.

The Clippers struggled on offense without star Kawhi Leonard, out because of ankle soreness. The Clippers shot 40.5% from the floor, including 18.2% (four for 22) in the second quarter. Minnesota shot 43.4% in the game.

The Timberwolves (37-23) scored just 15 points in the second quarter and still topped the Clippers, who had 11. Minnesota led 44-38 at halftime behind 12 points from DiVincenzo and 11 from Edwards.

Advertisement

The Clippers led by six in the third quarter and were up 68-63 heading into the fourth. Edwards’ drive and reverse layup put the Timberwolves up for good at 76-74 with 7:40 remaining.

The Clippers pulled within one three times in the last 2½ minutes, but Edwards answered each time. He scored the Timberwolves’ last nine points.

Up next for Clippers: vs. New Orleans on Sunday night.

Advertisement



Source link

Continue Reading

Minnesota

Church congregant filed lawsuit against alleged Minnesota church protesters

Published

on

Church congregant filed lawsuit against alleged Minnesota church protesters


A St. Paul church member has filed a federal lawsuit alleging that a group of individuals, including journalist Don Lemon and activist Nekima Levy Armstrong, unlawfully disrupted service last month as part of a coordinated political demonstration.

The complaint, filed by Ann Doucette in the U.S. District Court of Minnesota, alleges that a Jan. 18 demonstration at Cities Church interfered with her ability to worship and caused her to suffer damages, including emotional distress and trauma.

In addition to the former CNN anchor and Armstrong, the complaint names journalist Georgia Fort and activists Will Kelly, Jerome Richardson, Trahern Crews and Jamael Lundy. It also names St. Paul school board member Chauntyll Allen.

Doucette and seven of the defendants did not immediately respond to requests for comment. Doucette filed the complaint without the representation of an attorney. In an emailed statement to NBC News, Crews denied the lawsuit’s allegations “with empathy and compassion.”

Advertisement

The lawsuit accuses the group of civil conspiracy, aiding and abetting, intentional infliction of emotional distress, interference with religious exercise and trespassing.

“As a result of Defendants’ actions, the worship service was disrupted, congregants experienced fear and distress, and Plaintiff’s ability to freely exercise her religion in a private place of worship was unlawfully interfered with,” the lawsuit states.

All eight defendants are also facing federal charges for conspiracy against the rights of religious freedom at a place of worship and for interfering with the exercise of the right of religious freedom. Lemon has pleaded not guilty to all charges, saying outside the court, “I wanted to say this isn’t just about me, this is about all journalists, especially in the United States.”

Fort, Crews and Lundy were released on bond and entered not guilty pleas, according to The Associated Press.

Don Lemon reporting from an anti-ICE demonstration at Cities Church in St. Paul, Minn.@TheDonLemonShow via YouTube

This is the latest legal action tied to protests in the Twin Cities, where tensions remain over the Trump administration’s immigration crackdown and the fatal shootings of Renee Good and Alex Pretti.

Advertisement

According to the lawsuit, the demonstrators engaged in “coordinated conduct” by organizing meetings ahead of the “Operation Pullup” protest and promoting it on social media.

The lawsuit alleges that on the morning of Jan. 18, a coordinated group of individuals entered Cities Church, halting the worship service, and chanting “‘ICE Out!’ and ‘Hands Up, Don’t Shoot!’” while obstructing aisles. Protesters could allegedly be seen “confronting the pastor and congregants in a menacing manner,” the lawsuit says, noting that their chanting and “aggressive gestures” caused “severe emotional distress, fear, anxiety, and trauma” and caused children “terror.”

Demonstrators gathered at the church because they said its pastor, David Easterwood, was the acting director of an ICE field office in the city, the lawsuit says.

Lemon was arrested in January in California and accused of violating federal civil rights law after covering the protest on Jan. 18. He was released on a personal recognizance bond before a federal grand jury in Minnesota returned the indictment against Lemon and eight co-defendants, all of whom are also named in Doucette’s lawsuit.

Nekima Levy Armstrong, Cities Church protest arraignment, St. Paul, Minn., February 2026
Nekima Levy Armstrong in St. Paul, Minn., on Feb. 13.Carlos Gonzalez / Star Tribune via Getty Images

In the lawsuit, Doucette alleges that Lemon specifically livestreamed the protest, “noting congregants’ fear and distress, and appeared to take satisfaction in the disruption.”

Levy Armstrong, a Minneapolis-based civil rights attorney and activist, was also arrested for her participation in the St. Paul protest. Her arrest drew national attention after the White House shared on social media doctored photos where she appeared to be crying.

Advertisement



Source link

Continue Reading

Minnesota

Man arrested, charged with threatening to kill a state senator

Published

on

Man arrested, charged with threatening to kill a state senator



A Hubbard County man was arrested and charged after threatening to kill a Minnesota state senator on Facebook. 

Advertisement

Court documents filed on Wednesday state the Minnesota State Patrol were investigating a threat posted by John Tobias saying that he would “kill every one of you treasonous [expletive] immediately” if he did not get money back that he claims he lost during the 2020 COVID shutdown. 

Court documents go on to say that Tobias then called the Minnesota Attorney General’s Office asking for something to be done about “Minnesota Governor Tim Walz ‘unconstitutionally’ shutting down the state due to COVID-19. 

The Minnesota State Patrol contacted Hubbard County deputies regarding Tobias. Court documents state Hubbard County investigators were already familiar with Tobais after speaking with him regarding similar threats he made in Jan. 

The charging documents state that investigators searched Tobias’ residence on Tuesday and found an arsenal of guns and 45 boxes of ammunition. 

Tobias was taken into custody. During an interview with law enforcement, Tobias admitted to making the threat on Facebook. He also told investigators that “he did not have any intention of killing anyone, but admitted he was trying to get people’s attention,” according to court records. 

Advertisement

In late 2025, Lt. Col. Jeremy Geiger of the Minnesota State Patrol, who oversees Capitol security, told a panel of lawmakers that threats to lawmakers had doubled between 2024 and 2025. 

Tobias made his first court appearance Wednesday morning and is expected back in court early next month.  



Source link

Continue Reading

Trending