New York real estate magnate Seymour Durst installed the National Debt Clock in the city in 1989 when the U.S. national debt was approaching a then-unfathomable $3 trillion.
With the U.S. debt burden today 11 times larger, $32.6 trillion, Leslie “Les” Rubin, CEO and founder of Main Street Economics, is taking the shock value of a national debt clock showing the U.S. debt compounding at the rate of $163,750 an hour, a step further.
Rubin’s aim is to educate the public about the impending economic disaster of the U.S. national debt being 129% the size of its national gross domestic product (GDP). Next year alone, the U.S. will pay $1 trillion in interest on the debt.
At this rate, Rubin estimates that the U.S. national debt will top $50 trillion in 10 years and $150 trillion in 30 years—if it reaches these levels and does not implode first.
Newsmax Finance recently spoke with Rubin to ask him about the implications of the U.S. national debt, how it could be reined in—and how he is hoping to galvanize the American public to prod their elected leaders into action.
Newsmax Finance: Washington has successfully managed to kick the national debt can down the road for decades. What would need to happen to make the national debt an imminent crisis?
Les Rubin: The problem will occur when investors finally realize the debt is so large, and we have no means to repay it other than borrowing more. When they stop buying our debt, it will be curtains for the U.S. as we know it.
Newsmax: You just said “it will be curtains for the U.S. as we know it.” That’s a pretty dire prediction.
Rubin: The U.S. national debt is a bomb that is ready to explode. We have no source to repay or service the debt. That is a Ponzi scheme.
If we were to ever default on the debt, it would be a worldwide financial disaster. We are the world’s big kahuna. Unlike Greece that was bailed out by the EU with 86 billion Euros, there’s no one in the world to bail out the United States of America. If the Fed were to start printing money, it would lead to higher interest rates and create a “doom loop” cycle from which there is no exit.
Like a bankruptcy, the disaster would snowball quickly. The disaster would be cataclysmic.
Politicians and representatives in Washington are not in a position or willing to deal with this conundrum because they’re afraid they are not going to get reelected. Our aim at Main Street Economics is to reach out to the voting public to get them to understand the problem and call their elected representatives into action.
The only way we can solve this problem is to get the politicians to fix it through responsible fiscal and monetary policies.
Newsmax: What federal programs need to be cut, in your opinion?
Rubin: The whole welfare program is outrageous. When it was started in the 1960s, the intention was to raise people up out of poverty. In the past 60 years, the U.S. has spent $25 trillion to mitigate poverty—without bringing down the poverty level.
The Medicare, Medicaid and Social Security programs are ill-conceived financially, together costing the U.S. $1 trillion every year. The demographics of the Social Security system do not work. The trust fund will run out in 10 years, which will require benefits for future recipients to have to be cut.
Those three entitlement programs have to be reformed, or we won’t survive—and I haven’t even gotten into the trillions in COVID relief or President Biden’s Green New Deal.
Newsmax: What public policies and social services are most in danger right now?
Rubin: We cannot pay the debt back right now, but as long as we can continue borrow, none are in jeopardy.
When we lose our ability to borrow, everything will be in jeopardy. That is what my next book is all about, What Happens If…..The Greatest Ponzi Scheme on Earth Fails, which I am co-authoring with Dan Mitchell, an excellent, objective economist.
Newsmax: When Fitch Ratings downgraded the U.S. credit rating, should this have been a wake-up call to our leaders?
Rubin: It should have been, but Washington politicians will continue to blindly spend money we don’t have as long as they can, recklessly managing the economy. Some in Congress get it, but not enough to do anything about it. I am surprised we have as good a rating as we do.
Newsmax: Biden administration policies have increased the national debt by $5 trillion. Is this a concern to you?
Rubin: Of course, but this is not just Biden, this has been a consistent issue since Clinton managed a surplus. Each of the administrations since have mismanaged the economics of government, and that is creating the problem.
We are about to go into an election cycle, and now is the time for Americans to reach out to their elected officials and raise concern over this. This is the time for Americans to raise their hands at Town Hall meetings and with the presidential candidates and voice their concerns over this and what it means for the future of our country.
This is what we are focusing on at Main Street Economics, explaining the critical situation that we are in so that we can stop the profligate spending and advocate for a solution. Our website contains information on how Americans can reach out to their local and federal elected officials.
Newsmax: Have foreign nations, like China, lent money to the United States government?
Rubin: Yes, but not as much as people think. At one point, China held over $1 trillion of our debt obligations, but that is now less, as China has been liquidating its holdings. Actually, Japan is the largest lender at over $1 trillion.
Newsmax: How much better off as a nation would America be if government had not grown to be so big?
Rubin: Limited government is what was intended in the Constitution, and it worked for almost 200 years. Starting in the 60’s we have grown the monster and hurt our growth and the people we intended to help. Here is my formula for growth: Smaller government + lower taxes + balanced budget = more investment and faster growth.
Abraham Lincoln said it best: ‘With public support you can get anything done.” Thus, my tagline: Learn Economics, Then Vote Smart.
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