10. The Debt Crisis and the US Economy

This chapter reviews the American public debt, and shows that it has been increasing in size and in relation to gross domestic product (GDP), exceeding $20 trillion in 2017. Assuming recent growth rates will continue, the United States will accumulate more debt and pay more to service it. For the country to start repaying its debt, it has to have a budget surplus that exceeds interest payments. In view of current deficits, interest payments and rates of growth, the United States will never be able to repay its debt. Therefore, its monetary and fiscal policies need to be changed to increase revenues and reduce spending, or alternatively find a creative idea to repay its debt now—which the Ramo Plan is designed to do.