AMERICA'S DEBT PROBLEM

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Record: Extensions of Remarks
Section type: Floor speeches
Chamber: House
Date: September 3, 2026
Congress: 119th Congress
Why this source matters: Extensions of Remarks are statements submitted for the official record, even if they were not spoken live on the floor.

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People mentioned: Kelly, Mike

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HON. MIKE KELLY

of pennsylvania

in the house of representatives

Mr. KELLY of Pennsylvania. Mr. Speaker, I rise to include in the Record the following essay on behalf of Mr. Dave Jervis:

If a family making $60,000 a year spends $70,000 a year,

they will first use up their savings, then max out their

credit cards, and finally declare bankruptcy. Why should it

be any different with nations? Our Official U.S. Debt is

currently over $40 trillion and our actual U.S. Debt, which

includes Unfunded Mandates like Social Security, Medicare,

Medicaid, etc.—is variously estimated at $100-$200 trillion.

(Incidentally, $4.6 to $7

trillion of that $40T is reportedly linked to Covid-related

expenses like the stimulus payments, lost production,

compliance costs, vaccine costs, etc.)

So—How to judge the effect of even that lower number

($40T) on the Nation's economic health? Let's start by

asking—how much or how big is a trillion dollars? Well, we

can compare it to a million dollars, which is a thousand

dollars a thousand times over. Let's assume that you have

unlimited access to fresh, crispy new U.S. One-Hundred-dollar

bills (Benjamins). How high a stack of fresh, crispy new U.S.

Hundred-dollar bills does it take to make a million dollars?

The answer is 43 inches, about the height of your kitchen

countertop. OK—You continue to have access to unlimited

fresh, crispy new US Hundred-dollar bills—How high a stack

of fresh, crispy new US Hundred-dollar bills does it take to

make a Trillion Dollars? Well, a billion is a thousand

million and a trillion is a thousand billion, so a trillion

is a million millions. That means our 43-inch stack of

Hundred-dollar bills becomes 43 million inches high, which

converts to 678.66 MILES high for a trillion US dollars!

That's an inconceivable amount of money, so let me give you

three ways to help wrap your head around that:

(1) If you take a cross-country commercial airline flight,

you're flying about 6 or 7 miles up—so our trillion-dollar

stack is 100 times higher than your airplane is flying!

Inconceivable!

(2) Let's say you could hitch a ride with Elon, up to the

International Space Station, which orbits the earth at an

altitude of about 250 miles—that would still be only 37% of

the way up our trillion-dollar stack! A little over a third

of the way up . . . . Still inconceivable!

(3) Let's make one more try by going on up to the Hubble

Space Telescope, which orbits the earth at an altitude of 340

miles. That's still only half the way up our stack of US

hundred-dollar bills! So, there you have it, 43 inches versus

nearly 379 miles high! A trillion dollars is an inconceivable

amount of money—and hardly anyone understands that! It's an

insane amount of debt to incur.

Let's next talk about what $39T in debt means in terms of

the size of our US economy. The universally accepted way of

measuring that is to express a nation's debt as a percentage

of its Gross Domestic Product (GDP), which is the total

dollar value of all goods and services exchanged in a year's

time in that economy—a fraction/ratio with Debt over GDP.

It's currently 120%-124% in the US.

120% is also generally considered to be the level of

national debt that, if exceeded over time, will lead to major

problems like inflation and the failure of the currency. So,

we here in the US are at an inflection point, where we're now

consciously risking the future of the American Dollar. And

one recent increase in our debt by $1 Trillion—I think it

was from $37T to 38T—took only 71 days. Even the

Congressional Budget Office (CBO) anticipates US National

Debt growing by $2T/year. We are now the family making

$60,000 and spending $70.000 a year; and neither Republicans

nor Democrats seem interested in cutting spending to address

the problem, with one exception—that President Trump and

Treasury Secretary Scott Bessent are seeking to stave off

inflationary decline by expanding the denominator in that

ratio of National Debt over GDP, by reshoring and

revitalizing industry in America—they deserve credit for

that much.

America has been at or close to 120% in debt once before in

my lifetime—At the end of World War II, the U.S. national

debt-to-GDP ratio peaked at approximately 106% to 120%

(depending on who's holding the yardstick) in 1946, up from

42% in 1941. That massive debt, resulting from over $4

trillion in war spending (in 2026 dollars), was ameliorated/

resolved through a combination of high economic growth and

inflation, which reduced the Debt-over-GDP ratio to 23% by

President Johnson had created much or most of that 23%

when confronted with a spending decision whether to pursue

the Vietnam War or to fund his Great Society domestic

spending programs—he chose Option 3, Doing Both, and federal

spending got out of control again, so that by 1980 Federal

Reserve Chairman Paul Volcker (who is a genuine national

hero), had to raise interest rates to 20% to break the back

of inflation by inducing recession. But unlike today, Volker

was able to do that (with President Reagan's support), in

part because the Debt-to-GDP ratio he needed to address was

relatively low—similar to the 1941 pre-war number of 42%.

Here are some results of that—Mrs. J. and I got a just-

under-12% mortgage in 1979. Local friends got a 15% mortgage

in 1980; and our Ophthalmologist got an 18% mortgage that

same year. And a local car dealer was paying 21.5% in

interest, just to keep vehicles in inventory on his lot. We

sure hated Paul Volcker at the time, but he gave the US 40

years of prosperity with his brave patriotic action.

So how have we gotten back up to a 120% debt level again,

without an existential threat like WWII? The short answer

is—again—government deficit-spending; but what facilitated

that overspending? Let's look more closely at our currency

itself, the US Dollar and its history. After the

Revolutionary War, upon gaining our freedom from Great

Britain, we certainly did NOT want to copy the British Pound

as our currency, so we copied the Spanish Milled Dollar—a

silver coin that was perforated (in slices like a pie) so as

to be divisible into eight bits worth 12 cents each—the

famous Pirate money Apieces of eight. (In fact, up through my

childhood, a US quarter was still called two bits.) And the

BIG thing was that our dollar was to be either composed of,

or completely backed by, precious metals, specifically gold

and silver.

Our US Founding Fathers understood the historically proven

need for a national currency backed by something of Tangible

Value, specifically precious metals; and in the US

Constitution, as part of prohibiting State currencies and

assuring a viable National currency, they specifically

provided in Article 1, Section 10, that, No State shall . . .

make any Thing but gold and silver Coin a Tender in Payment

of Debts; . . . Then over time, an unfortunate series of

court decisions that I don't pretend to understand, allowed

President Richard Nixon to take the US Dollar off of what's

called the Gold Standard, such that a paper dollar could no

longer be taken to any bank and exchanged for gold or silver

specie, meaning coins. So how did that happen?

My understanding (and again, I have only a partial

understanding) is that our European WWII Allies had shipped

much or most of their gold holdings (backing their

currencies) to the US for safekeeping during the war, and

that they were over time repatriating that gold to their

custody after the war. But as that gold kept being withdrawn

from our custody, we (the US) apparently became increasingly

concerned (and this is what I don't understand), so that when

French President Charles DeGaulle made a request/demand for

repatriation of French gold, President Richard Nixon closed

the gold window, declining the French request/demand, and in

the process, taking the US Dollar off of the Gold Standard.

Again, that meant that people could no longer take their US

Dollar bills to a bank and redeem them for physical gold.

Maybe it would have drawn down our reserves too much—I

simply don't know. But I DO know what has happened since that

time.

Up until the aftermath of WWII, our US Dollar had always

been exchangeable for precious metals—and that tie to gold

and silver had prevented the US from incurring debt that

could not be repaid, because there had to be enough gold and/

or silver in storage to back that amount of debt. Then on a

Sunday evening, August 15, 1971, spurred by that French

demand, President Nixon, in a televised speech, suspended the

convertibility of the US Dollar for gold. At the time, it was

called the Nixon Shock, and like many government edicts, it

was said to be a temporary thing. But it still stands today,

and August 15, 1971, is now correctly called the day the US

Dollar died. The Dollar died because our government could

then print and spend as many dollars as it wanted, with no

need for it to be backed up by gold and/or silver. A greater

number of dollars chasing the same or similar basket of goods

and services is called inflation; and a national currency

with no tangible backing is called a fiat currency. (As an

aside—fiat dollars are also a major reason the family unit

is struggling in the US, because two incomes were then

needed, such that neither spouse could focus primarily on

household matters and rearing children.)

Since 1850, 52 other nations have attempted to operate with

an unbacked fiat currency, and 51 of the 52 have failed, thus

throwing their populations into poverty. (The 52nd is Japan,

which is a producer nation more than a consumer nation like

the US; but it's just on a slower path to poverty—and we're

even involved now in propping up the unbacked yen with our

unbacked dollars.) The reason for all those currency failures

is that the populace learns that it can vote for itself

largesse (benefits) from the public treasury by simply

pressuring their legislators, who find that their election or

re-election can depend on promising more freebies than their

opponent. That has been the case in the US, to the point

where there is now little to no realistic chance of repaying

our national debt in a normal way—or even a political

appetite for doing so.

I mentioned earlier that the US inflation rate was greatly

accelerated by the Covid debacle. And the US Government's

Consumer Price Index (CPI) is now so completely corrupted and

compromised, as to have no relation to the prices people

actually pay. Up until 1986, the CPI did a reasonably good

job of gauging inflation. But beginning that year, eight (8)

significant changes have been made to the calculation

formula, such that it now greatly understates the actual

inflation rate; and in the last 6 years, especially, it has

wildly underestimated inflation. Several others have

developed alternative CPI indexes that are more accurate,

with the latest being a website called realityindex.co. Using

realityindex.co as a base, Jeffrey Tucker of the Brownstone

Institute has found that we have experienced a 65% overall

increase of consumer prices from 2019 to 2026 (with groceries

at this writing [June 2026] running at an astounding 8.2%

inflation rate). That 65% number is an incredible loss in

purchasing power, compared to the government CPI, which shows

only a 26% loss in purchasing power over the same time

period. And other competent economic authorities have

confirmed the validity of Tucker's work.

Dean Clancy of Americans for Prosperity reportedly posits

that when we read the Ninth and Tenth Amendments plus the

Obligation-of-Contracts clause (Article 1, sec. 10, cl. 1) of

our US Constitution, we can identify

five monetary policies that are constitutionally requisite in

the US, two of which are pertinent to this discussion:

(1) Only gold and silver coins and currency (banknotes

fully backed by and readily redeemable in specie [gold or

silver coins]) may serve as legal tender; and

(2) Neither the states nor Congress may issue fiat money

notes (bills of credit . . .). One can only hope that his

position on the first item above would be tried in the courts

and found to have merit—and to start the process of

reclaiming our national economic sanity.

So—Back to consumer inflation to close this out—Other

than cutting back on non-essential purchases and being a so-

called smart shopper, what might you do with all this? What

can help your family in a wider framework or sense? Further

inflation/shrinking of the US Dollar is now baked-in (thanks

to government deficit spending), and the result will be the

continued hollowing out of our Middle Class. It's not trite

to say that we must PRAY for America, for our politicians,

and for our upcoming generations. And of course, to impress

upon our elected officials the need for major cost-cutting

action on their part—for openers, how about a Federal

Balanced Budget? I believe that we must walk a deep valley of

stagflation or recession/depression if we are to hand over

this land, as we have known it, to our children and

grandchildren.

And in a narrower financial sense, one other answer is to

own Hard Assets—tangible things you can touch, like land,

buildings, gold, silver, classic cars, some fine art, and

some collectibles or other physical items that would hold

their value through inflationary times. If you can swing the

cost of buying and owning a house or apartment, don't rent

one—a house or a condo is the most common and most-sought-

after Hard Asset owned by Middle Class folks. I've also read

that a top-gun financial expert recently recommended that we

need to scale down from building 2200-to-2400-square-foot

houses and go back to 1200-1400-square-foot houses. And there

are people out there who are researching cheaper-per-square-

foot (modular) housing that would be delivered in pieces by

truck, to reduce the amount of required on-site labor. (Some

of that is already happening.) So that's some of what I'm

seeing and hearing lately, and I hope this has helped you

with some of the background that produced the inflation we're

seeing.

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