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

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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.

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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.

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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

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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

D.C. Memo: Trump admin accuses Minnesota of SNAP fraud

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D.C. Memo: Trump admin accuses Minnesota of SNAP fraud


WASHINGTON – The Trump administration’s war on Minnesota resumed this week with the continuation of Immigration and Customs Enforcement’s “Operation Metro Surge” and an escalation of President Trump’s rhetoric about the state’s Somalis and Gov. Tim Walz.

Secretary of Agriculture Brooke Rollins opened a new front by also attacking Walz this week, saying in a post on X that the state’s food stamp program was beset by fraud perpetrated by “illegals” and “transnational crime rings.”

“@GovTimWalz. Welfare benefits are for the truly needed,” Rollins said. “Not bad actors, Not criminals. And not for Illegals. @USDA compliance investigations will be asked to reauthorize to accept SNAP. Say goodbye to trafficking, transnational crime rings, and skimmed benefits in MN retailers.”

Rep. Angie Craig, D-2nd District, quickly pointed out that it’s the USDA, not the state, that is responsible for licensing and overseeing retailers that accept Supplemental Nutrition Assistance Program (SNAP) payments from their customers through EBT cards.

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“USDA has the responsibility to oversee SNAP retailers, so tweeting about my governor is idiotic,” said Craig, the top Democrat on the House Agriculture Committee. “Undocumented individuals have never been eligible for SNAP benefits. This is just another cruel effort from this administration to use Minnesota’s immigrant community as pawns in its fights with a Democratic-led state.”

Minnesota was already at loggerheads with Rollins because it is one of 22 states that have failed to provide the USDA with records of its SNAP program, including the names of recipients and transaction data.

Rollins, who issued the request on May 6,  has threatened non-compliant states with the elimination of  the federal funds to administer the program. Those funds have already been reduced by Trump’s “big beautiful” budget bill, which resulted in hikes in property taxes in Minnesota where individual counties run the food stamp program. A further reduction in federal funds could wreak new havoc on the budgets of the state’s counties.

Instead of providing information about their SNAP program to Rollins, Minnesota and the 21 other states have sued the USDA.

“USDA’s attempt to collect this information from Plaintiff States flies in the face of privacy and security protections in federal and state law,” the lawsuit says.

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It also says that, while the USDA has demanded the information to detect “overpayments and fraud,” the move “appears to be part of the federal government’s well-publicized campaign to amass enormous troves of personal and private data, including information on taxpayers and Medicaid recipients, to advance goals that have nothing to do with combating waste, fraud, or abuse in federal benefit programs.”

Minnesota’s GOP lawmakers, however, have sided with the USDA on this issue.

Reps. Brad Finstad, R-1st District; Pete Stauber, R-8th District; Tom Emmer, R-6th District; and Michelle Fischbach, R-7th District, wrote to Walz and the leaders of Minnesota’s state Legislature this week

The lawmakers said an analysis of the 28 GOP-led states that did provide the information requested by Rollins found substantial fraud in the food stamp program.

Among other things, the lawmakers asked the Walz administration to provide “a full explanation” of why the state did not complete “required security assessments of SNAP systems” and “an update on the state’s response” to Rollins’s data request.

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Senate stumbles on extending ACA subsidies 

As was expected, the U.S. Senate on Thursday failed to approve a Democratic bill that would have extended enhanced Affordable Care Act subsidies and a GOP bill that would have provided those who buy health insurance from MNsure or from ACA exchanges in other states with expanded health savings accounts as an alternative to the enhanced subsidies.

Those enhanced subsidies allowed higher-income Minnesotans (making up to 400% of the federal poverty level or $128,600 in income for a family of four) to receive help in paying for their health insurance premiums. They also increased aid for those with lower incomes.

About 90,000 Minnesotans benefited from those enhanced premiums. But they expire on Dec. 31. The subsidies are paid directly to insurers and the nation’s insurance companies have already factored the loss of that money (about $40 billion a year) in their proposals for 2026 rates, which will increase substantially for those who purchase insurance from an ACA exchange.

Even those who receive their health care coverage from their employer or purchase their health care outside an exchange will see premiums rise, because of medical inflation and GOP cuts to Medicaid as well as the expectation the enhanced GOP subsidies will end.

Thursday’s Senate votes were part of a deal Senate Majority Leader John Thune, R-S.D., made with Democrats to end the government shutdown last month.

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But a bipartisan compromise has been elusive. Sens. Amy Klobuchar and Tina Smith joined their Democratic colleagues in voting for an extension of the subsidies and against the GOP plan. Both bills were rejected because they failed to secure the 60 votes needed to end a filibuster.

“By refusing to act, Congress has put millions of Americans in an impossible position — forcing families, farmers, and small business owners to question whether they can even afford to keep their insurance,” Klobuchar said in a statement. “I will keep fighting to end this health care crisis, lower costs, and increase access to quality care.”

The prospect of extending the enhanced premium subsidies faces an even steeper climb in the U.S. House, where GOP leaders continue to seek an end to the Affordable Care Act.

Still, there is faint hope for a bipartisan compromise. Two bipartisan bills in the House would extend the subsidies for a year or two, with restrictions on those who would qualify for the aid.

House Speaker Mike Johnson, R-La., does not want to schedule a vote on legislation that would extend the ACA subsidies. But he said he will allow a vote next week on a Republican alternative. 

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Meanwhile, House sponsors of the bipartisan bills are seeking the signatures of a majority — or 218 — of House members that would force consideration of their bills.

Even if lawmakers are able to hold a vote on a bipartisan compromise, that cannot be done until next year. Congress plans to leave Washington, D.C., on its holiday break next week.  

In other news:

▪️We wrote about President Trump’s stepped up attacks on the Somali community in Minnesota and U.S. Rep. Ilhan Omar, including public calls for the Somali-American lawmaker to be deported.

▪️We also shared an AP story about the Trump administration’s plan to provide $12 billion for farmers struggling in the wake of a trade war spawned by new tariffs on China.

▪️How thorough has an audit of payments in the state’s 14 Medicaid program been? Matt Blake took a look.

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▪️Also, Cleo Krejci interviewed a GOP state lawmaker who is resisting calls for Republicans to refute President Trump’s comments about Somalis, calling it “selective partisan outrage” on the part of Democrats.

This and that

A reader responded to a story about President Donald Trump’s latest, and most disturbing, attack on Rep. Ilhan Omar and Minnesota’s Somali community, which referenced a Tuesday rally in Pennsylvania at which Trump said, “Why is it we only take people from shithole countries, right? Why can’t we have some people from Norway, Sweden?”

“What Trump is saying is no less vile than what Nazis said about Jews,” the reader wrote. “He wonders why modern America is not attracting Norwegians, Swedes and Danes? The answer – those places are far better places to learn, work, raise a family and age in good health.  Nobody wants to live in a place led by an angry, violent and psychotic bully when they have a better option.”  

Please keep your comments, and any questions, coming. I’ll try my best to respond. Please contact me at aradelat@minnpost.com.

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So Minnesota: Enchanted Fantasy Film Museum brings Hollywood magic to Twin Cities

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So Minnesota: Enchanted Fantasy Film Museum brings Hollywood magic to Twin Cities


So Minnesota: Enchanted Fantasy Film Museum brings Hollywood magic to Twin Cities

One museum in the Maplewood Mall brings a part of Hollywood glamour to the Twin Cities.

William Swift is the owner and curator of Enchanted Fantasy Film Museum.

“I own the largest display of film costumes in North America, which is crazy,” Swift said.

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There are more than 350 costumes and props on display from over 90 films and TV shows.

“I have stuff from Narnia, the Power Rangers, and have quite an extensive collection from Game of Thrones,” Swift said. “It’s just so cool and so fun to share with people such a grand collection. We never get anything like this in Minnesota or even really in the Midwest.”

Years ago, Swift, a longtime film buff, started collecting screen-used movie memorabilia in auctions. In 2024, he opened the museum with his massive collection.

“Eventually I ran out of room in my house, and I thought maybe it was time to take that leap of faith,” Swift said.

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MyPillow’s Mike Lindell announces he’s running for Minnesota governor as a Republican

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MyPillow’s Mike Lindell announces he’s running for Minnesota governor as a Republican


MyPillow founder and CEO Mike Lindell has announced he will run for Minnesota governor in 2026 against incumbent Gov. Tim Walz.

Lindell, 64, last week filed the paperwork to potentially run, but at the time said he hadn’t yet 100% decided on a gubernatorial run. On Thursday, he made it official.

“After prayerful consideration and hearing from so many of you across our great state, I’ve made the decision to enter the 2026 gubernatorial race,” Lindell posted on social media Thursday. “I’m still standing and I’ll stand for you.”

Lindell will run as a Republican and a noted ally of President Trump, and enters a crowded field of names who have already tossed their hats into the ring, as Walz, a Democrat, attempts to secure an unprecedented third consecutive four-year term as Minnesota’s governor.

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“We’ve seen what happens when we elect a con man to the highest office in America,” Walz said Thursday, responding to Lindell’s announcement. “We can’t let it happen here in Minnesota.”

In addition to Lindell, state House Republican speaker Lisa Demuth has already announced a run for governor, as well as Scott Jensen, the Republican candidate who lost to Walz in the 2022 midterms. Other Republican hopefuls include Minnesota Rep. Kristin RobbinsKendall Qualls and defense lawyer Chris Madel

Lindell launched a campaign website, listing his main campaign priorities as including stopping fraud, fixing “failing school systems,” stopping “exploding property taxes” and “send(ing) illegal immigrants back.” 

Lindell’s MyPillow has been at the center of a number of legal issues through the years, and earlier this year was ordered to pay hundreds of thousands of dollars to shipping company DHL.

Also, a judge this year ruled that Lindell defamed election technology company Smartmatic after he alleged their voting machines rigged the 2020 presidential election in favor of former President Joe Biden. Lindell made similar unfounded claims against Dominion Voting Systems.

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Minnesota has a history of political outsiders overperforming in statewide races, most notably former Gov. Jesse Ventura’s surprising win in 1998, but also it’s been two decades since a Republican won a statewide race in the increasingly blue-tilting state. 

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