- The tongue-in-cheek petition, whose stated aim is to reduce the national debt, has been signed more than 8,600 times as of Tuesday.
- Selling Montana, the fourth largest state in the country, would constitute the largest land deal since the Louisiana Purchase.
- The national debt is often a source of concern for individuals, but the chances of the U.S. defaulting on its debts are relatively low — in part because the bulk of the national debt is owned by the American public.
In February, the U.S. national debt hit a record $22 trillion, a landmark figure that highlights the staggering extent to which government borrowing exceeds tax collections. So, you’re probably wondering: What has Montana been doing to help out during the many years in which the national debt has been spiraling out of control? Nothing. It’s been sitting there, being utterly useless since it glommed onto the union in 1889.
That’s the argument behind a new petition that seeks to sell the nation’s 41st state to Canada for a cool $1 trillion.
“We have too much debt and Montana is useless,” Ian Hammond, the main petitioner, wrote on Change.org. “Just tell them it has beavers or something.”
On Tuesday, more than 8,666 people had signed the petition, which has a goal of 10,000 signatures. And it turns out some of those supporters are self-described Montanans.
Montana is rarely in the national spotlight. When the state is mentioned, the focus is usually on what Montana lacks: people (particularly black residents), big cities, professional sports teams and an American president who was born there. So, what does Montana have? A nearly $5 billion tourism sector built around the natural beauty of “The Treasure State”, including attractions like Yellowstone National Park, Glacier National Park and Flathead Lake, one of the largest in the country.
Love it, hate it, or often forget it exists, Montana is probably not worth selling to Canada — in part because $1 trillion would hardly make a dent on the national debt.
How much does the national debt really matter?
The national debt is, in short, all the money the government has borrowed to finance its operations beyond what it’s collected in tax revenues. Some of this debt is owned by foreign countries, like China, but the bulk of it is actually owned by Americans — by the Federal Reserve, the Social Security system, banks, pension plans, mutual funds, insurance companies and individual investors, as Martin Crutsinger noted for The Associated Press.
The sheer size and fast-rising nature of the national debt — currently $22 trillion — often worries individuals. After all, the national debt has probably risen thousands of dollars in the time it takes you to finish this sentence. But is there any reason for you to be concerned?
“That depends on whom you ask,” Crutsinger wrote for The Associated Press. “Many economists say they fear that the rising debt represents a time bomb that will eventually explode and derail the economy. That is especially true, they argue, in light of projections that the annual deficits are once again headed above $1 trillion and will be stuck at those levels for years as the government pays the rising costs of Social Security benefits and Medicare health insurance for vast numbers of retiring baby boomers.
But some economists counter that with interest rates so low, the government shouldn’t be worried about reducing the deficits — at least not now. Instead, they contend, the government should focus on making worthwhile public investments in such areas as education, infrastructure, health care and environmental protections.”
If rising national debt still keeps you up at night, here’s one step you can take, as described by William D. Lastrapes, professor of economics at the University of Georgia, in an article for The Conversation:
“…buy Treasury securities with the money saved from low current taxes and bequeath those securities to your kids.
They can use the principal and interest to pay off high future taxes, with no ultimate effect on their net wealth or well-being.
In other words, taxpayers can use capital markets to offset transfers of their wealth – via taxes – to bondholders by becoming bondholders themselves. In aggregate, as long as private saving rises with government borrowing – and it is plausible to assume that it will if people feel the need to save to pay higher future taxes – the latter need not crowd out borrowing for productive activity by the private sector.
And then worrying about the federal debt won’t keep you from a good night’s sleep.”