Every child born in the U.S. this year inherits a very unwelcome legacy from their Uncle Sam - a debt of almost $14,000. In other words, with the public debt at $13.6 trillion, the average family of four owes close to $56,000, or almost twice the average family income, on the national debt. This terrible legacy is a drain on individual and national resources and on the economy.
|Robert Mitchell, NAHB President
In fact, just paying interest on the debt is an enormous burden. This year, $230 billion in federal taxes - roughly $1000 for every person in the country - will go toward interest on the debt. In comparison, the nation’s entire defense budget totals about $288 billion.
For years, NAHB has advocated paying down and eventually eliminating the public debt to stimulate economic growth, promote homeownership opportunities and lower interest rates on mortgages and other loans. Consider the positive impact of reducing mortgage interest rates from today’s 8 percent rate to 6 percent. Such a drop would reduce the monthly payment on a $100,000 mortgage by $112 and dramatically increase the number of Americas who could afford to purchase their first home.
Now, it appears, momentum is building to do just that. House Speaker Dennis Hastert (R-Ill.) has instructed the House Budget Committee to draft legislation aimed at paying off the nation’s debt by 2015. And Federal Reserve Board Chairman Alan Greenspan, who is widely credited with engineering the nation’s current economic expansion, recently urged Congress to use as much of the $30 billion budget surplus as possible to reduce the federal debt.
NAHB applauds Speaker Hastert’s leadership on this crucial matter and urges a concerted bipartisan effort to meet this important goal. According to the speaker’s office, "paying off the public debt makes more money available in the private sector for savings and investment, which yields greater productivity, robust economic growth and the creation of new jobs."
We couldn’t agree more. And even though it’s too soon to know exactly what the legislation will include, NAHB strongly supports the concept of eliminating the national debt.