Wed 17 Oct 2007
The Scale of the Federal Debt
Posted by Jack under Debt, Federal Debt
This post is part of the Federal Debt Discussion series.
The American National Debt is a staggeringly large number. It is several times larger than the total amount of US Dollars in circulation. Even trying to visualize that much money in stacks or circling the globe many, many times is very difficult to do.
Fortunately, the sheer size of the debt is not the big issue. It is the size of it in relation to the rest of economy and the federal budget that determines if it is sustainable or not. On that scale, it does not seem quite as bad. Here are some current figures:
On October 17, 2007, at about 11:15 am MST (GMT -7), the debt is estimated to be $9,056,509,178,557.40 - yes that is over $9 Trillion dollars.
This number is both accurate and somewhat misleading as a significant part of the debt is owed by one part of the government to another part of the government. This intra-governmental debt is detailed in the Federal Debt portion of the Treasury Bulletin. The most recent issue shows that about $4 Trillion.
Public Debt
That leaves over $5 Trillion owed to the public. The US Census estimates that there are 303 Million people living in this country.
Translated into per person figured for every man, woman and child, this is:
- $29,700 in total debt
- $16,501 in publicly held debt
- $13,199 owed for future obligations
It is these future obligation that are held by different departments of the federal government, with most of it held by Social Security and Medicare. It is these intra-governmental obligations that are going to reach $0 when Social Security and Medicare go 'bankrupt'.
Debt vs GDP (Gross Domestic Product)
The debt as a percentage of GDP has varied historically over the years. Currently, it sits above 60% of GDP. This means that to pay off the debt in one year, it would take more than 60% of what this country as a whole produces to eliminate the debt. Historically, since 1930 this figure has ranged from just below 20% to around 120% [just after World War II].
Fortunately, the debt is spread out over different maturities coming due any time from the next week to several decades from now. Additionally, our government and economy are seen as strong enough that there are no problems exchanging old debt for new as the old matures. Thus, we are in no danger of an immediate credit crunch.
Looking Ahead
Even with the sheer size of the debt, it has not gone horribly wrong yet. Interest payments are slightly above 10% of the annual budget. Even in a personal budget, paying out 11% of income as interest is a hefty chunk, but is not necessarily an immediate problem. Having a large mortgage payment alone could be enough to reach this level.
The concerns, as will be enumerated later in this series, is that projected increases in mandatory government expenditures - especially Social Security and Medicare - will become a fiscal crisis as obligations grow and the workforce shrinks. The way to avoid that is to address the issues now. Unfortunately, the current Administration and Congress do not appear to be ready to do so.
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October 18th, 2007 at 11:05 am
“One if by Land and the Lantern is Lit…”
Our Constitutional Republic has been destroyed. The foundation of American Liberty has been either distorted, erased or forgotten. Our entire planet is ruled by an oligarchy of established bankers, oilmen and global corporations. We the People find ourselves enslaved and intoxicated by an economic system that by design, destroys the prosperity, development and education of the Worlds Citizenry.
The Federal Reserve and its fiat monetary policy need to be abolished. The unconstitutional (and enslaving) 16th Amendment needs to be repealed. Congress needs to listen to the people and convene an Article V Convention so we may work towards restoring the Constitutional Republic that our “elected” officials have stolen from us and sold to the highest bidder within the corporatocracy.
Our government is allowing the corporate elite to successfully merge Canada, Mexico and the United States into a single supra-national entity, the North American Union - complete with its new currency the “Amero”, which will be ushered in just after the fabricated collapse of our economy. The fascist Tories within our government are working towards another false-flag attack similar to 9/11 to “justify” an attack on Iran and the further erosion of our civil liberties in America.
A Halliburton subsidiary, KBR has already been awarded a $385 million contract to construct “detention centers” in the United States. Any puppet President of the United States now has the power to enact martial law and fully transform America into a police state. The conditioned-complacent public in this country and all the Worlds Citizenry need to act now to save what few liberties we have left. Rediscover Patriotism. Resurrect Dissent. The time has come to ascend upon Washington and RESTORE THE REPUBLIC!
October 18th, 2007 at 2:26 pm
Readers, please let me know what you think I should do with that comment - keep it, delete it, highlight it in a post of its own, or ???.
On one hand, it is both sobering and entertaining to see that there really are people who truly believe in conspiracy theories.
On the other hand, it is off topic, full of rhetoric, has ambiguous calls to action and is curiously devoid of both accepted facts or where to find his information.
Ideas? Comments of your own?