The Ever Ballooning US Gross National Debt

During fiscal 2014, ended September 30, the US Government piled $1.086 trillion in new gross national debt on top of the existing mountain to bring it to $17.824 trillion. Money that the US government owes the Chinese, Japanese, Russians, and so on, and a large number of US investors too, including the Social Security “Trust Fund.”

Some of these entities had no choice but to accept US debt. Others made conscious decisions to buy it, betting that this debt, which is supposed to be their most conservatively invested asset, will somehow turn into a good investment albeit with a very low yield that ranges currently from near zero for 13-week T-bills to 2.95% for 30-year T-bonds. Those folks holding Treasuries with longer-dated maturities are praying that their asset won’t be eaten up by a bout of inflation in the future, and they’re praying even harder that yields won’t rise anytime soon because that would actually cut the value of their asset. If both happened at the same time…. Better not even contemplate this scenario.

Back in October, I wondered how the debt could jump $1.086 trillion in a fiscal year when the government claimed that it had reduced the “deficit” to $483 billion. And this is what the Gross National debt looked like through fiscal 2014 with its near exponential growth since 2001, a bipartisan fiasco without equal during my lifetime: