National Debt

“Blessed are the young for they shall inherit the national debt” (Hoover). This is a quote from Herbert Hoover, 31st president of the United States. What the quote is saying is that the debt the country is building up at that time, will be dragged down to today causing problems. A national debt is when a country is borrowing more money than they are making and this has been the problem in the U.S since the founding of our country. This seems to be a problem for us, it seems that we want to spend, and spend, and spend, more money than we can make to achieve something or to satisfy our own needs. This is screwing us over in the long run, causing us to slowly mess up or country's economy. Over the growth of our country the debt has decreased and

So let’s skip a few years ahead to a time when our country faced one of its most difficult time, the Civil War. The Civil War was a time that the U.S was in conflict with itself over how the country should be run. Due to the Civil war the U.S would end up hurting its economy. Lincoln was the president at the time and he would have to make some decisions that would help to try and fix the economy. So what happened was that the U.S, for the first time in American history, would have a federal income tax to try and fix the debt. Now what does this mean? Well it means that this is when income tax started, the percentage of money the government takes out of your check at the end of the week. Although this was for a brief time in the late 1800s, and would reappear in the early 1900s and become permanent, this would become one of the earliest kinds of taxing our government would do and this was one of the ways our government could ensure to gain money without having to rely on exporting

But how did this happen and how does this play with our national debt? Well in the 1940s to the 1950s World War 2 was ending and soldiers were coming back to America and wanting to seek a college education. So soldiers that would return home would take a loan and go to college, but they could actually pay off their loans. In the 1980s the tuition rates started to rise and cause a little trouble for people, but nothing severe like now. We now look at 2012, a very bad time for student loan debts. The amount of people that went to college in the U.S was 20 million that year, 12 million (60 percent) borrowed money and took out student loans and the average student debt was 25,000 thousand dollars, this would cause 1 out of every 10 people to be indebt once getting out of college. Let’s do some quick math, if you were to graduate College with all 4 years under your undergraduate degree with a 25,000 dollar loan with an interest rate of 6.8 percent, how long would it take to pay it off? Let's say you receive 150 dollars a month, it would take 42 years and 8 months to pay it all off. Why so much? The interest would cause a 51,000 dollar increase, double your initial cost. Let's say you receive 200 dollars a month, it would take you 18 years and 3 months to pay it off, with an interest of 18,000 dollars, ⅔ of what you originally borrowed (Josuweit). There could be a time that you could