1,221,000,000,000.00: What Does This Number Mean?

Thirteen figures! That's a Trillion! With a capital T. That's one big number. Americans should get used to it. It's the amount of annual interest on our national debt, currently at a mind boggling $37.5 Trillion and growing daily. This annual interest payment equals 17 pecent of the federal budget and is the single greatest expenditure at this time, easily exceeding the defense budget. What, if anything, does this mean?

Firstly, we should note that no one in Washington is brave enough to discuss this problem. It is responsible for many effects on our daily lives, from the price of essential items, to what we pay for loans, to the value of our savings, to the taxes we pay. Secondly, it causes the cruelest tax of all, namely inflation, which, despite the actions of the Federal Reserve Board,

will not moderate but will continue to increase. Federal spending is out of control; the push to lower taxes is increasing and the demand for entitlements is increasing simultaneously. Our national security is in jeopardy as our greatest creditors are foreign nations, in particular, China (PRC). The government, regardless of party, is drunk on debt and will continue to spend as if there is no tomorrow, and one fine day our creditors will either refuse to roll over the maturing debt or will demand higher interest rates. Either option will cause an increase in the interest rate on Treasury bonds which will then ripple through the economy causing increased inflation. Inflation is defined as an increase in prices due to more money chasing fewer products. Simple supply and demand results in the price rising with subsequent debasement of the currency. Money, internationally today, is simply fiat money, that is money with no backing other than the willingness of a party to accept it. It isn't backed by gold or silver or anything other than the "good faith" of the issuer, whatever that is worth. All countries today issue fiat money. US currency was backed by gold until 1933 and by silver until 1965. Today our coins are worthless from the point of view of their metallic content. You can infer from this that the currency may not be worth the paper it is printed on. (Trivial fact: the most common bill in circulation is the $100. It also is the largest bill issued.)

One soution to the chronic inflation and associated increase in the national debt as well as the chronic balance of payments deficit which the US faces is to increase production, and the quantity of goods being offered, thus solving the supply demand equation. Alas, most products offered for sale in the US are now manufactured abroad. America must be re-industrialized and workers put back to work in good high paying productive jobs. The institution of reciprocal tarifffs is long overdue; whether American industry can be resuscitated is an open question whose answer remains to be determined. A service economy does not produce material goods and the world stuation is causing us to become an army with a nation as Prussia was defined. We are not in a position to solve the problems of the world. Our domestic problems must take priority and we can no longer have unlimited immigration into our country with the economy we now have. Putting Americans back to work should increase the tax rolls and decrease the demand for entitlements, thus reducing the national deficit and debt at the same time. It took decades to reach the current disaster we face. It is a long term problem and will take decades to solve. Monetary policy cannot solve our economic problem as it is in almost perpetual conflict with the government's fiscal policy. As production and productivity increase there will be a natural decrease in the inflation rate as there will be American manufactured products on the market and their purchase will soak up excess dollars in circulation. Currency depreciation will cease and price stability can be established.

To understand the depreciation of the American dollar, let's look at the following two quotes:

"Do you see that man over there? He's a millionaire, he has $10,000" said by my grandfather to my parents sometime in 1933.

"A billion here, a billion there, and pretty soon you're talking about real money" allegedly said by Sen. Everett Dirksen (R-IL) about government spending in the 1960s.

Government waste was fought in the past heroically by Senators John J. Williams (R-DE) and William Proxmire (D-WI). In fact, Proxmire issued 168 "Golden Fleece Awards" in his fight to end wasteful spending. Regrettably, today, with record breaking deficits every year there are no legislators following in their footsteps. All of this must stop or the country will eventually face economic ruin. Prices go up but the value of the product is stable and unchanging. People need to understand that the rise in prices for any item reflects the decreasing value of the currency, which by defintion must be a storer of value but is not. The worst investment one can make today is to deposit one's savings in a bank. In fact, during inflationary times, savings is the worst personal strategy. The soundest strategy is to own precious metals or to be deeply in debt as one repays their debts with cheaper dollars.

Everyone feels that they are paying too much in taxes. All people feel entitled to entitlements. If this country is to survive someting has to give. It cannot go on. The politicians must recognize that they are not the masters of the nation but rather its servants.

The legacy that they leave will affect us for generations. Now is the time for courage on their part. They need to be reminded of the famous quote from John F. Kennedy's inaugural address "ask not what your country can do for you-ask what you can do for your country".

Garry S. Sklar

Las Vegas, NV

November 2, 2025