Effects of America’s $32 Trillion Debt On Economy, Society, and Possible Solutions To Reduce Them

By Dayo Adesulu July 14, 2023Last Updated: July 14, 2023

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How is America indebted to the tune of $32 Trillion?

You may have heard that the United States has a huge national debt, which is the total amount of money that the federal government owes to its creditors. But did you know that the national debt is only one part of total America’s debt? In fact, there are other types of debt that add up to a staggering $32 trillion, according to a recent report by the Institute for Economics and Peace.

In this blog post, we will explain what these different types of debt are, how they affect the economy and society, and what can be done to reduce them.

The first type of America’s debt is the public debt, which is also known as the national debt. This is the amount of money that the federal government borrows from domestic and foreign investors by issuing bonds and other securities. As of July 2021, the public debt was about $28.5 trillion, or about 128% of the gross domestic product (GDP), which is the total value of goods and services produced in a year. The public debt has increased significantly in recent years due to the COVID-19 pandemic, which required massive spending on stimulus packages, health care, and unemployment benefits. The public debt also reflects the chronic budget deficits that the government has run for decades, meaning that it spends more than it collects in taxes and other revenues.

The second type of America’s debt is private debt, which is the amount of money households and businesses owe banks and other lenders. This includes mortgages, student loans, credit cards, car loans, and business loans. As of 2020, the private debt was about $16.8 trillion, or 76% of GDP. Personal debt has also increased in recent years due to low-interest rates, which make borrowing cheaper and easier. However, high levels of private debt can pose risks to financial stability and economic growth, especially if borrowers default on their payments or face sudden shocks such as job losses or health emergencies.

The third type of American debt is social debt, which is the amount of money the government promises to pay for future benefits to its citizens. This includes Social Security, Medicare, Medicaid, and veterans’ benefits. As of 2020, the social debt was about $55.9 trillion, or about 253% of GDP. The social debt is not counted as part of the public debt because it is not legally binding and can be changed by Congress. However, it represents a moral obligation and a political expectation that the government will honour its commitments to its people. Social debt is projected to overgrow in the coming years due to the ageing population and rising healthcare costs.

The fourth type of debt is ecological America’s debt, which is the amount of money needed to restore the environment to its pre-industrial state. This includes costs such as reducing greenhouse gas emissions, restoring biodiversity, cleaning up pollution, and adapting to climate change. As of 2020, the ecological debt was about $15.7 trillion, or 71% of GDP. The ecological debt is not officially recognized or measured by any government or international organization. Still, it reflects the impact that human activities have on the natural resources and ecosystems that sustain life on Earth. The ecological debt is likely to increase in the future as environmental degradation and climate change worsen.

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To reduce ecological America’s debt, the United States need to take urgent and ambitious actions to protect and restore our planet’s health. Some of these actions include:

Switching to renewable energy sources such as solar, wind, hydro, and geothermal power
Reducing our consumption of fossil fuels such as coal, oil, and gas
Improving our energy efficiency and conservation practices
Promoting green transportation modes such as public transit, biking, walking, and electric vehicles
Implementing carbon pricing mechanisms such as taxes or cap-and-trade systems
Supporting reforestation and afforestation projects
Preserving and expanding natural habitats for wildlife
Reducing our waste generation and increasing our recycling and composting rates
Adopting more sustainable lifestyles such as eating less meat, buying local and organic products, and avoiding single-use plastics
Educating ourselves and others about environmental issues and solutions

The fifth type of American debt is the peace debt, which is the amount of money that would be saved if there were no violence or conflict in the world. This includes costs such as military spending, security services, crime prevention, incarceration, health care for victims and perpetrators, lost productivity, and psychological trauma. As of 2020, the peace debt was about $14.4 trillion, or 65% of GDP. The peace America’s debt is based on an estimate by the Institute for Economics and Peace of how much each country spends on containing or preventing violence every year. The peace debt could be reduced if there were more peaceful relations among nations and within societies.

As you can see, America’s total debt is much larger than just its public debt. It encompasses various aspects of economic, social, environmental, and political well-being. Reducing this America’s debt would require comprehensive and coordinated policies that address both short-term and long-term challenges. It would also require a shift in mindset from consumption to investment, from conflict to cooperation, and from exploitation to sustainability. By doing so, America could improve its fiscal health, enhance its quality of life, and contribute to global peace and prosperity.

You can read more of such stories at Credible News and The Cheer News.