The U.S. Department of the Treasury reported that the U.S. government incurred a deficit of $204 billion for the month of February 2013. So far, we are into the first five months of the government’s fiscal year (started October 1, 2012), and the U.S. government fiscal deficit has already grown by $494 billion. (Source: U.S. Department of the Treasury, March 13, 2013.) The U.S. government has been running a deficit of over $1.0 trillion in each of the past four years. For 2013, the Congressional Budget Office (CBO) expects the deficit to be $845 billion—which is less than a trillion-dollar budget. (Source: The Hill , February 5, 2013.) (But if I pro-rate the $494 billion the government has already tagged on this year, a rate of $99.0 billion a month, I get another $1.0-trillion deficit year.) Sadly, while many are taking “less” deficit as good news, our national debt is still growing. Remember: when the government doesn’t have money to spend, it must borrow. The budget deficit for this year is going to see the U.S. national debt increase to well above $17.0 trillion. In February, the U.S. government paid interest of $16.8 billion on the debt it has borrowed through issuing bonds. Since the beginning of the fiscal year, it has incurred interest expenses of $168.4 billion. I don’t think the mainstream realizes that the more the government adds to the national debt through budget deficits, the more interest payments it will have to make. This year it expects to pay almost half a trillion dollars in interest. This amount will rise as the national debt increases and interest rates increase. Eventually, the U.S. government will go into a downward spiral when interest payments become a major part of its monthly outlays. With all this said, if the staggering municipal bankruptcies force states to look for bailouts from the U.S. government, then you, dear reader, be the judge of where the national debt will go. (And I haven’t even mentioned the trillion-dollar student loan crisis!) It might sound crazy today as we witness the stock market move to new highs, but what I do see happening, as the U.S. national debt increases, is the possibility of austerity measures , similar to those implemented in the debt-infested eurozone. At the end of the day, whatever money the government borrows, the taxpayers are the ones on the hook for it. With national debt currently standing at $16.7 trillion, each taxpayer in the U.S. owes more than $147,000. (Source: U.S. Debt Clock web site, last accessed March 14, 2013.) Imagine what happens when the national debt reaches $20.0 trillion! Greece’s troubles started in 2009, when its national debt ... Read More