- The current national debt level of about $17.3 TRILLION places an average debt load of over $150,000 on every American household
- In other words, every household in America would have to write a check worth over $150,000 to cover the cost of the national debt where it stands today
- On a per person basis, every American, from the youngest baby to the oldest senior citizen would have to pay almost $55,000 each to pay off the debt where it is today. Thus, a typical family of four would have to write a check for almost $220,000 to pay for its share of the debt.
- he United States Gross Domestic Product, the total annual value of all goods and services provided, is between $16 and $17 TRILLION. Thus, the debt load is now bigger than the entire productive output of the entire country in any given year
- According to Obama administration official documents, this administration will add almost $8 TRILLION to the national debt during its eight years in office.
- This is about 80% of the size of the total national debt that was added to the overall debt level by EVERY single Presidential administration that came before him. In other words, during the Obama watch, almost $8 billion will be added to the national debt level. The total debt incurred by every other President was about $10 TRILLION, I.e. the trend is not good
- The Obama administration will ring up about four times as much debt as the debt ridden Bush administration
- According to Erskine Bowles, former co-chair of the National Commission on Fiscal Responsibility and Reform, the annual cost of debt servicing, the amount the Federal government pays out in interest on the debt is about $230 billion annually
- Thus, in theory, every U.S. household is paying out over $2,000 a year just to pay interest on the national debt, $2,000 that cannot be used to grow the economy or make life better for our families
- But according to Bowles, current interest rates are historically low; if they were to return to the long term median level that existed throughout the 1990s, the annual per household cost of servicing the debt would grow three fold to about $5,700 a year
- Servicing the debt does not mean you are paying it down, you are only paying the interest that the debt is throwing off
- At historically average interest levels, this would make debt servicing one of the largest Federal budget line items.
- At these high levels, “taxing the rich” would be like pissing in the ocean of debt that the U.S. has in front of it. The richest American, Bill Gates, is worth about $70 billion which would represent only about .4% of the overall debt.
- Additionally, a recent L.A Times article estimated that the 85 richest people in the world are worth about $1.7 Trillion. This means that even if the Federal government could steal the wealth of these 85 people and apply it against the national debt it would only pay off about 10% of the $17 TRILLION, a figure that continues to grow by hundreds of millions of dollars every day
- And the real insult in this whole matter is that our public schools still under educate, our infrastructure (roads, bridges, etc.) is falling apart, tens of millions of Americans still live in poverty, our national security is still at great risk, our borders are not sealed, major social programs such as Social Security are lurging towards insolvency, I.e. we have nothing to show for the $17 TRILLION that the Washington political class wasted away.
Really serious and bad news for our future and the future of our country. If this dangerously high rate of spending and debt growth continues, at some point in time people around the world are going to stop lending us money, fearing that we will not have the ability to pay it back.
When that happens, the revenue available to the Federal government to spend drops dramatically since it will have to live only on the taxes it receives from the American public. This will mean dramatic cuts to Social Security, Medicare, national defense, and other government programs and likely severe hardships on many Americans.
Unfortunately, the bad budget news does not end at the borders of Washington D.C. According to the latest analyses and report from the State Budget Solutions organization:
- Their fourth annual State Debt Study reveals that U.S. state governments face a combined $5.1 TRILLION state government debt.
- This state level debt comes out to over $16,000 per person which is in addition $55,000 per person Federal debt load discussed above.
- This state debt is equal to 469% of the total annual state general and other fund expenditures.
- By far, pension and retirement liabilities are the greatest reason for the high debt, accounting for 79% of all state debt.
- But not all state debt loads are the same. The five states with the highest per person debt include Alaska at $40,714 person, Hawaii at $33,111, Connecticut at $31,298, Ohio $27,836, and Illinois $24,959. These states will place the most hardship on their state residents when the time eventually comes to fix their out of control spending and debt.
- Compare these high debt loads to the national average of about $16,000 per person, meaning that some states have done a much better job of keeping debt under control.
A sad, sad commentary on fiscal irresponsibility by the American political class, writing checks and making promises in the past that obviously cannot be backed up short of tremendous financial hardships on today’s citizens. And again, all for nothing, given the crummy condition of many aspects of American life.
And the really sad and frightening part is that many/most in the political class today do not get these simple budget realities. The Federal government is expected to run up an annual budget deficit of hundreds of billions of dollars in the next five years. No states have seriously taken a shot of overhauling their budget processes and levels to get their revenues in line with current and future liabilities.
There is absolutely no political leadership that will confront the economic realities and lead the country into a government spending austerity mode, cutting extraneous government programs, eliminating wasteful and inefficient government operations, prosecuting criminals that rip off government programs, and finally cutting out corporate welfare for political cronies who do not need handouts from the American taxpayer.
And the longer that leadership void exists, the larger the hardships will be when the economic realities reach critical mass. At some point debt cannot be financed. At some point, pension and retirement benefits have to be cut. At some point, you can no longer increase taxes to make up for an ever growing and ever more inefficient government operation. The longer the wait for leadership, the crueler the financial impacts on everyone.
If these realities scare you, may we suggest that you join our team to impose term limits on all current Federal government politicians at:
It is not until we get leaders into Washington that are more concerned about our financial future than they are concerned about their next election that we finally can get fiscal responsibility in place to minimize the future economic pain. Because really, how much worse could it get compared to the debt and inaction we are currently getting out of Washington?
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
www.loathemygovernment.com
It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
http://www.youtube.com/watch?v=08j0sYUOb5w
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