This column seeks to define our national debt problem and solicit innovative solutions to it.

Deficit is defined as the amount the federal government spends, each year, over the amount it takes in.

National debt is defined as all of the deficits added up minus the years when budget surplus was used to reduce the debt. This has only happened five times since 1969.

Many articles analyze the U.S. National Debt against the GDP, Gross Domestic Product. A more direct comparison is the debt to the federal income and federal budget; the debt relative to the ability of the federal government to carry the debt or pay it back.

The current national debt is $22 trillion. The magnitude of this number is difficult to grasp. It’s $22 million million. The total value of all the U.S. corporations on the New York Stock exchange is $34 trillion; we owe 65 percent of that.

The total net worth of the 400 richest people in the U.S. is $2.7 trillion; forget about them paying off the debt. They can’t even dent it. It’s really a lot of money.

China is our largest creditor at $1.2 trillion. Japan is second at $1 trillion. There is no specific collateral for the debt, other than the good faith of the U.S. government.

The federal budget for 2019 is $4.407 trillion. The federal income is estimated at $3.422 trillion.

The deficit is $985 billion; almost $1 trillion. The interest payment on the debt is $475 billion. The interest rate is 2.16 percent; a very low rate by historic standards. If the debt interest rate increases, which it will if we have inflation, our debt interest payment will also increase.

To stop the debt from increasing, the deficit spending has to end. The budget would need to be reduced by $985 billion. This would probably require a Balanced Budget Amendment to the Constitution. Federal spending would need to go down from $4.407 trillion to $3.422 trillion.

It gets worse if we want to pay the debt off. If we got a typical home mortgage, 30 years at 2.16 percent, our payment would be $1 trillion per year. To eliminate the deficit and make the debt payment federal spending, on everything other than the debt, we would need to decrease from $3.897 trillion (subtracting the debt interest from the budget) to $2.897 trillion.

These budget cuts would be extremely unpopular.

The alternative to budget cuts is to increase federal income, probably through increased taxes. Tax rates would need to increase by about 28 percent. Again, this would be extremely unpopular.

Two other items bear mentioning:

1. We have nothing to show for the $22 trillion. Most people borrow money to buy an asset — real estate, a business, a car, a plane. Typically, these assets produce income to pay off the debt or the asset itself can be re-sold to repay the debt. Our government didn’t acquire any assets. Apparently, we paid for a lot of wars and paid a lot of bills.

2. The $4.407 trillion budget is largely already committed to payments that will be difficult to decrease; specifically, military, Social Security, health care, federal employee/military pensions and other entitlement programs.

Our problem defined is financial and political. Our financial problem is dire, but there is a financial solution for it.

Our political problem relates to “free” money that is created when money is borrowed and never paid back. Everyone in the U.S. is getting some of this free money. No one wants his free money to end. We vote against politicians who want to end our free money. Our politicians want to get re-elected, and they get a nice piece of the free money, so they vote to allow the deficit spending to continue.

Our political problem is more problematic than our financial problem. It substantially increases the difficulty of implementing the financial solution to our financial problem.

We are at risk. If the world refuses to buy our debt and requires us to pay back our current loans we will face an extremely difficult situation. If this occurs at a time of economic collapse, military confrontation or environmental catastrophe we will be very vulnerable.

Historically, the most common outcome to this situation is:

• Default on the National Debt; bankruptcy.

• Hyper inflation; remember Germany with wheelbarrows full of worthless paper money.

• Massive tax increases; possible tax revolt

• Austerity; paying it back. A long hard road.

The United States is the largest, most successful experiment in democratic government in human history. It will be a shame if we crash it due to fear and greed in the form of irresponsible fiscal policies and irresponsible leadership.

Robert Jaeger is a part-time Roaring Fork Valley resident and a retired real estate appraiser living in Gainesville, Georgia. He asks to please email your innovative solutions to USDebt22T@gmail.com, to be synthesized into a follow-up article.