National Debt: What is it & What’s in it for me?
In a nutshell, as of 11/23/09, the national debt is $12,011,838,881,463.68 (12 trillion, 11 billion, 838 million, 881 thousand, 463 dollars & 68 cents) 1 & you owe $40,039 as does every man, woman & child in the US.
For a little background, the national debt is the amount of money the government owes to domestic & foreign entities along with the amount of money it uses in order to operate. The government receives over 90% of its revenues through taxes (individual, corporate & payroll). 2
“The deficit is the difference between what the US Government (Government) takes in from taxes and other revenues, called receipts, and the amount of money the Government spends, called outlays. The federal deficit is over $1.4 trillion dollars. 3 In short, not only is the government over $12 trillion in debt, but they have spent $1.4 trillion dollars that that the taxpayer does not have.
Candidate Obama promised he would not raise taxes on middle class Americans. President Obama will not be able to keep this promise. Let’s explore why. For the sake of this argument, let’s define “middle class” as those making $100,000/year or more.
According to the US Census Data, in 2008, there were 10,243,000 middle class Americans. The national debt remains at over $12 trillion; however, the number of people available to pay the same amount of debt has decreased. The amount owed by each of the 10 million people becomes $1,172,688. Each middle class American would need to give each dollar of his/her salary to the government each year for over 12 years. The 10,243,000 people would use each dollar they make to support the remaining 289,757,000 citizens in the US. This is a point in time; however, the spending continues.
In the 1 minute & 30 seconds that you have read to this point in the article, the US Government has spent another $3.3 million dollars (using calculations derived via www.usdebtclock.org & www.treasury.gov).
If the government took the profits of all the Fortune 500 companies (e.g., Wal-Mart, Coca-Cola, etc.) it would take 145 years to pay off the $12 trillion national debt. However, by that time and at the rate of spending, the US Government, will have spent an additional $251,499,600,000,000 (251 trillion, 499 billion, 600 million)
If you are one of the many Americans affected by the current economic conditions, your household has found ways to tighten its belt through fewer, if any, vacations, stay-at-home meals, bargain shopping and other cost-cutting measures. Of course, if the bank account does not support it, you do not spend it.
Obama believes that continuing to spend money will “save” the economy; does this sound like “saving the economy” to you:
- An unemployment & underemployment rate of 17.5%. 4
- Mortgage delinquencies & foreclosures of 937,840; 23% higher than this time in 2008 5
- Over 550 bank failures & FDIC funds in a deficit 6
- Devalued dollars 7
- $894 billion healthcare bill 8
Rising debt, soaring unemployment and raising taxes are a recipe for disaster. If you don’t have the money, you don’t spend. If only the US government lived by the same philosophy.
- The debt to the penny & who owes it (Treasury.gov) http://www.treasurydirect.gov/NP/BPDLogin?application=np
- Where the money comes from & where it goes ( Whitehouse.gov) http://www.whitehouse.gov/omb/rewrite/budget/fy2002/guide02.html
- CBO says federal deficit hit record $1.4 trillion for fiscal year 2009 http://blogs.abcnews.com/thenote/2009/10/cbo-says-federal-deficit-hit-record-14-trillion-for-fiscal-year-2009.html
- Jobless, underemployment rate hits 17.5% http://phoenix.bizjournals.com/phoenix/stories/2009/11/23/daily13.html
- Foreclosure activity hits record high in October http://www.realtytrac.com/foreclosure/foreclosure-rates.html
- Lending declines as bank jitters persist http://online.wsj.com/article/SB125907631604662501.html?mod=WSJ_hpp_MIDDLTopStories
- Dollar hits 14-year low against the yen http://www.breitbart.com/article.php?id=CNG.172a2f217acbdb6e4e9b446773ee0f1c.111&show_article=1
- Congressional Budget Office (CBO) report to Charles Rangel http://www.cbo.gov/ftpdocs/106xx/doc10688/hr3962Rangel.pdf