The problem with increasingly high national debt is that it is killing this country's economic growth.
To that point, please examine this chart closely:
|Click on image to enlarge|
In 1993, Clinton came to office and because of an agreement he made with Newt Gingrich and his "Contract with America," he lowered the debt. The ratio fell from 64% to 54% and the growth in GDP in his two terms returned to the post war average of 3.8%. Still, over all, from 1981 to 2000, the average GDP growth was only 3.4%; primarily because of the "H.W." Bush recession. Then in 2001, 9/11 hit and the U.S. started increasing the debt again with tax cuts and security measures; and, two wars in the Middle East. Thus, under "W" Bush the debt ratio rose throughout his two terms in office and GDP growth was 1.8%. Now, spending and debt accelerated under Obama and the debt ratio rose from 64% to over 100% in 2012 (on this chart); 105% as of right now. GDP growth on his watch was slightly better than Bush at 1.9%. But, understand that 1.9% included a better than average 2.5% growth in 2014 because of an accounting change that added intellectual property to the methodology in calculating GDP and, which, probably added a full percentage point growth to the 2014 number. Thus, historical apples-to-apples growth calculation of GDP should have only been 1.5%.
Simply, high debt ratios kill economic growth. If our economy continues to grow at 1.9% through 2025, the GDP will stand at $21.2 trillion and if out debt rises to the Obama Administration's projected $26.2 trillion, the debt ratio will be 123%. A ratio higher than after World War II. But, my guess is that the current 1.9% will fall as the debt ratio continues to rise.
I realize there are some out there who aren't buying the correlation of a high debt ratio to slowed GDP growth. Then I would point to a country like Italy that has been growing their debt for decades. In 2013, its debt ratio rose to 130.4% and its GDP growth looks like this:
Clearly, high debt has stymied Italy's economy and, I could show you similar charts for all those European countries that are in financial trouble. This is why we, as a country, need to stop this debt accumulation because President Obama has already put us above the ratio of 100%.
President Barack Obama on Monday unveiled a $4 trillion fiscal year 2016 budget that will add more than $6 trillion to the national debt over the next 10 years: http://www.usnews.com/news/articles/2015/02/02/7-numbers-to-know-from-obamas-2016-budget
Obama Wants Huge Spending Hike As Debt Tops $18 Trillion: http://news.investors.com/ibd-editorials/011615-735155-obama-wants-to-bust-spending-caps-by-68-billion-dollars.htm
Projected Debt in 2025 Due to Obama's Budget: $26.3 Trillion: http://www.weeklystandard.com/blogs/projected-debt-2025-due-obamas-budget-263-trillion_836791.html
Debt Clock: http://www.usdebtclock.org/
Debt under Reagan: https://www.google.com/search?q=debt+under+reagan&ie=utf-8&oe=utf-8
Really? The Fastest Growth In GDP Since 2003?: http://cuttingthroughthefog.blogspot.com/2014/12/really-fastest-growth-in-gdp-since-2003.html
Italian government debt - Wikipedia, the free encyclopedia: http://en.wikipedia.org/wiki/Italian_government_debt
Greece still bust, Spain depressed, Italy paralysed: https://thenextrecession.wordpress.com/2013/08/05/greece-still-bust-spain-depressed-italy-paralysed/