Minnesota
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.
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.”
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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.
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.
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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.
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Minnesota-backed bill to make bald eagles the national bird heads to Biden’s desk
The bald eagle could soon become the national bird of the United States after a bill backed by Minnesota legislators passed the U.S. House on Monday. The bill earlier passed the Senate, and now awaits the signature of President Joe Biden.
You’d be forgiven for thinking the bald eagle already held the title of national bird. The bald eagle is on the national seal and has been a symbol of the U.S. since the country’s founding. But the U.S. has not had an official national bird.
Minnesota lawmakers introduced a bill to change that. Sens. Amy Klobuchar and Tina Smith helped lead the bill in the Senate, where it passed with bipartisan support in July.
“The bald eagle is a symbol of our country’s freedom and strength,” Klobuchar said in a statement. “With the passage of our legislation, the bald eagle will now officially be recognized as our nation’s national bird.”
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Minnesota U.S. Rep. Brad Finstad introduced the House version of the bill; the rest of the Minnesota delegation signed on as cosponsors.
“More than 240 years ago, the Founding Fathers identified the bald eagle as a symbol of the strength and independence promised in our new nation,” Finstad said in a statement following the bill’s passage on Monday. “Today, we rightfully recognize the bald eagle as our official national bird — bestowing an honor that is long overdue.”
The bill drew support from the National Eagle Center in Wabasha, where eagle aficionado Preston Cook displays part of his 40,000-piece eagle collection. He’s been an advocate for designating the eagle as the national bird.
“This is an exciting day,” Cook said in a statement following the House vote. “With this legislation, we honor its historic role and solidify its place as our national bird and an emblem of our national identity.”
Legislators said Minnesota was a logical backer for the bill — the state has the second-highest number of bald eagles, behind only Alaska.
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Minnesota Vikings clobber reeling Chicago Bears to move into tie atop NFC
Aaron Jones and Cam Akers had touchdown runs in the second half to complement a smothering performance by the Minnesota defense, and the Vikings moved into a tie for first place in the NFC North on Monday night by beating the Chicago Bears 30-12 for their seventh consecutive victory.
Justin Jefferson had seven catches for 73 yards, among them a touchdown from Sam Darnold in the first quarter that was set up by Jonathan Greenard’s sack and forced fumble on Caleb Williams.
Williams managed to keep alive his NFL rookie record streak of 286 straight passes without an interception for the eighth straight game, but the Bears (4-10) have lost all of those. The first overall pick in the 2024 draft went 18 for 31 for 191 yards and threw a late touchdown pass to Keenan Allen after a blocked punt gave the Bears the ball at the Minnesota 27.
The Bears went 1 for 12 on third down and 1 for 3 on fourth down.
Darnold went 24 for 40 for 231 yards and threw his first interception in five games for the Vikings (12-2), who clinched a spot in the playoffs with Seattle’s loss to Green Bay the night before. They’ve got the division title squarely on their radar after Detroit’s 11-game winning streak was stopped by Buffalo on Sunday.
Wearing white helmets for the first time in franchise history to top the snow-like jerseys and pants in their now-annual winter-themed home game – comfortably staged indoors – the Vikings had an energized crowd behind them after former wide receivers Cris Carter and Jake Reed took a Randy Moss jersey to midfield for the coin flip in honor of their ex-teammate, who is being treated for cancer. Jefferson shouted, “We love you, Randy!” after his touchdown catch.
D’Andre Swift rushed 19 times for 79 yards for the Bears, who’ve been outscored 53-0 in the first half over the last three games. According to Sportradar, they’re the first team with three consecutive scoreless first halves since Jacksonville in 2018.
The Bears have been reeling not simply because of the losing streak but their 2-6 record in games decided by a touchdown or less. The firings last month of offensive coordinator Shane Waldron and later coach Matt Eberflus prompted a change in play-callers on both side of the ball, too.
Once again, the Bears produced a handful of can’t-happen plays that ultimately doomed them. Swift was stuffed for no gain on a toss sweep on fourth-and-1 from the Chicago 39 on the opening possession and again on a fourth-and-1 run at the Minnesota 29 in the second quarter.
In the third quarter, Swift had a short touchdown run negated by a penalty when backup center Doug Kramer neglected to report as an eligible receiver when he’d entered the game as an extra blocker at the goal line.
After that, rookie Kiran Amegadjie, who took three penalties in his first NFL start and was beaten badly by Greenard on the strip-sack, was called for holding. The Bears settled for a short field goal.
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