Spending

The problem of the $37 trillion dollar US debt is seen by many as insurmountable but the way out is to go the reverse of the way in. In 1950 the US budget was $42 billion and in 2025 it was $7 trillion. This is an annual increase of seven percent. Inflation over these 75 years was 3.5% or one half of the increase in government spending. The government agrees to limit any increase in spending to one half percent less than the inflation rate. So, if over the next 75 years the inflation rate is 3.5% and the government increases spending at 3% the following would be the result. The budget in 75 years would rise to $92.4 trillion but spending would only increase to $64 trillion and the debt would be down to $9 trillion. Currently the debt to GDP ratio is $37 trillion divided by $31.5 trillion or 120%. If the GDP increased by 3.5% it would be $384 billion and the debt to GDP ratio would be 17% instead of 120% and that would be manageable. In other words, if the government would commit to increase annual spending by one half percent less than the inflation rate the debt problem would be solved. Will elected officials have the courage to limit spending. Not! Do they have to keep spending at twice the inflation rate? No!