In a recent USA Today article by John Waggoner, he shares with us that the US govt now owes a shocking $11.4 trillion greenbacks. That works out to be roughly $37,000 per individual in the U. S. and it does not stop there. The govt is scheduled to add an additional 15.78% more in debt - $1.8 trillion bucks - in the subsequent fiscal year. And that is not including interest on the debt we already have.

So, what does this mean for the US economy? Well, the options aren't agreeable.

First, it will probably mean a rise in taxes, a fall in what we spend in the future or most likely both. Plus, it will potentially also lead to inflation.

First, we will need to increase the quantity of money we have coming in to begin to pay off the debt we owe. How does the US state get cash loans to pay down this debt? Through taxes. Somebody, somewhere, somehow will need to pay this money back and that will come from some type of tax increase.

2nd, like many individuals who've been living outside their means are learning in our new economy, we want to stop any spending more than we are bringing in. The US government, reputedly, has yet to learn this lesson. The govt. will have to cut back on what it is spending, which will mean either massive enhancements in efficiently allocating money and/or a significant decrease in what they are providing.

we intend to likely see a mixture of both : increases in taxes and less services for it. So, if you're the vocal complaining type, get prepared to start griping about having to lay out extra for less because that's where we are headed.

Another way to reduce the weight of our nation's's overpowering debt is to permit or encourage inflation. If you owe $13 trillion greenbacks, it's way easier to repay that debt if $13 trillion dollars isn't worth the cash advance that it used to be. If people working at starter positions are earning $500,000 each year due to inflation ( which i hope is a gross exaggeration of my point ), then re-paying $13 trillion will be far easier to do. And that is a part of the difficulty.

There are massive incentives for the govt to not only let inflation occur but to actually encourage it as the amount it owes balloons beyond control. Although it is certainly hideous news for the savers of the Earth or those that are living on fixed income, for people who have taken on big amounts of debt or invested in inflation friendly investments, they can rest nicely on the same side as the US government where inflation could be working, at least partly, in their favor.