Sunday
Nov292009
Debt Perspective – How bad is it?
Sunday, November 29, 2009 at 3:48PM
As posted at the Inside Scoop:
The federal government has a spending problem. It simply cannot collect enough taxpayer revenue to slake its ravenous thirst. Most Americans can feel that the spending has accelerated but they cannot grasp the numbers being batted around in the media. Just how much money are the politicians in Washington spending and can the country continue on this path? Let’s try to put some perspective on the numbers so the average person can wrap their mind around the problem of our high-rolling politicians.
The financial condition of the United States can be seen streaming live at usdebtclock.org. I will be using this website to reference many of my figures. I would invite you all to go to their website and see the numbers streaming in for yourself. It is truly eye-opening (not to mention depressing and enraging).
Does anyone remember not too long ago when a billion dollars was a lot of money? When being a millionaire was considered being rich and being a billionaire was beyond our wildest dreams? Our politicians have squandered our money to the point that we now talk trillions of dollars and most people simply cannot comprehend how much money we are referencing. We must be made to understand what we’re doing to our country and what we’re leaving for our kids.
How much is a trillion dollars? Well, here it is in numerical form: $1,000,000,000,000. It is a one with twelve zeros following it. You could refer to it as one-thousand-billion dollars or even one-million-million dollars. That’s right; if you had a trillion dollars you could simply give one million dollars to one million people!
Let’s convert these numbers into more tangible examples. A dollar bill is only a scant 0.0043 inches thick. If you stacked a trillion one-dollar bills they would reach an astounding 67,866 miles high! That’s not end to end, that’s just stacked flat. Or how about this, let’s attach a roll of one trillion dollar bills to an F-16 fighter plane from the 115th Fighter Wing of the Air National Guard in Madison. If that plane were flying at the speed of sound (768 miles per hour), it would take approximately 14.4 years to unroll those one trillion dollar bills!
The U.S. budget deficit for this year stands in the vicinity of 1.4 trillion dollars. Prince Fielder, the home-run hitter of the Milwaukee Brewers, will earn about 7 million dollars this year. Mr. Fielder would have to play for 200,000 seasons just to pay for our debts from this year alone. Unfortunately we’ve been amassing debt for several years and owe much more than that.
Aaron Rodgers, the quarterback for our beloved Green Bay Packers, is slated to make about 9.7 million dollars this year. The accumulative U.S. national debt is currently just above 12 trillion dollars. This means that Aaron Rodgers would have to play for 1,237,113 seasons to pay off our debt. This would equate to 19,793,814 consecutive regular season starts for Mr. Rodgers assuming he remains injury free (not to mention living several million years). As staggering a figure as this is, it still wouldn’t be enough to pay off all of our politician’s promises.
The elephant in the room that no one wants to talk about is the total U.S. unfunded liabilities. These are programs passed and promises made by our politicians that include Social Security, Prescription Drug Liability (Medicare Part D), and Medicare itself. These promises, without any funds to pay for them, total a whopping 106 trillion dollars! John Menard, the owner of the Menard’s chain of home improvement stores, is currently the wealthiest person in the state of Wisconsin. Forbes ranks Mr. Menard at #44 on their list of richest Americans with a net worth of 5 billion dollars. Even with all of his great wealth, we would need to liquidate the assets of 21,200 billionaires like him to pay for all of the empty promises of our politicians. Unfortunately there are only 793 billionaires in the whole world right now. There goes the “tax the rich to pay for it” theory.
Still unable to fathom just how reckless our politicians are with our money and just how much trouble we are in as a nation? Let’s pare down the government’s numbers to the equivalent of one household’s income and see how that person’s balance sheet would look. We’re going to assume the total U.S. federal tax revenue to be $1,882,673,000,000 (it is constantly moving upward as they take more from us).
The median household income in Wisconsin is $50,578. If this household were as irresponsible with their money as our politicians, they would have spent $88,189 this year; $37,611 more than they earned. This could have been for a new car on a secured loan, a big screen TV on a signature loan, or maybe a nice family vacation on the credit cards. This household would have an accumulated debt of $322,380 for their mortgage, loans, and credit cards. In total, however, this household would be on the hook for an amazing $2,847,689 for such things as time shares, adjustable rate mortgages, balloon payments, appliances with 12 months same as cash, payday loans, introductory interest rate credit cards, and service agreements. If this family’s income remained unchanged, they had no other expenses, and no taxes were withheld from them it would take them over 56 years to pay off the mess they’ve made.
Would you ever allow such a household to manage your money? Of course not. But that household is our government and we do continue to send the same politicians to Washington with predictable results. Social Security is broke. Medicare is broke. Fannie Mae and Freddie Mac are broke. The Post Office is broke. The Fed has printed over 1 trillion (there’s that number again) dollars in new currency. We’re begging the Chinese to buy our debt so we can keep spending. Each man, woman, and child in the U.S. now owes $39,040. So how did we get to this point?
More to come…
The federal government has a spending problem. It simply cannot collect enough taxpayer revenue to slake its ravenous thirst. Most Americans can feel that the spending has accelerated but they cannot grasp the numbers being batted around in the media. Just how much money are the politicians in Washington spending and can the country continue on this path? Let’s try to put some perspective on the numbers so the average person can wrap their mind around the problem of our high-rolling politicians.
The financial condition of the United States can be seen streaming live at usdebtclock.org. I will be using this website to reference many of my figures. I would invite you all to go to their website and see the numbers streaming in for yourself. It is truly eye-opening (not to mention depressing and enraging).
Does anyone remember not too long ago when a billion dollars was a lot of money? When being a millionaire was considered being rich and being a billionaire was beyond our wildest dreams? Our politicians have squandered our money to the point that we now talk trillions of dollars and most people simply cannot comprehend how much money we are referencing. We must be made to understand what we’re doing to our country and what we’re leaving for our kids.
How much is a trillion dollars? Well, here it is in numerical form: $1,000,000,000,000. It is a one with twelve zeros following it. You could refer to it as one-thousand-billion dollars or even one-million-million dollars. That’s right; if you had a trillion dollars you could simply give one million dollars to one million people!
Let’s convert these numbers into more tangible examples. A dollar bill is only a scant 0.0043 inches thick. If you stacked a trillion one-dollar bills they would reach an astounding 67,866 miles high! That’s not end to end, that’s just stacked flat. Or how about this, let’s attach a roll of one trillion dollar bills to an F-16 fighter plane from the 115th Fighter Wing of the Air National Guard in Madison. If that plane were flying at the speed of sound (768 miles per hour), it would take approximately 14.4 years to unroll those one trillion dollar bills!
The U.S. budget deficit for this year stands in the vicinity of 1.4 trillion dollars. Prince Fielder, the home-run hitter of the Milwaukee Brewers, will earn about 7 million dollars this year. Mr. Fielder would have to play for 200,000 seasons just to pay for our debts from this year alone. Unfortunately we’ve been amassing debt for several years and owe much more than that.
Aaron Rodgers, the quarterback for our beloved Green Bay Packers, is slated to make about 9.7 million dollars this year. The accumulative U.S. national debt is currently just above 12 trillion dollars. This means that Aaron Rodgers would have to play for 1,237,113 seasons to pay off our debt. This would equate to 19,793,814 consecutive regular season starts for Mr. Rodgers assuming he remains injury free (not to mention living several million years). As staggering a figure as this is, it still wouldn’t be enough to pay off all of our politician’s promises.
The elephant in the room that no one wants to talk about is the total U.S. unfunded liabilities. These are programs passed and promises made by our politicians that include Social Security, Prescription Drug Liability (Medicare Part D), and Medicare itself. These promises, without any funds to pay for them, total a whopping 106 trillion dollars! John Menard, the owner of the Menard’s chain of home improvement stores, is currently the wealthiest person in the state of Wisconsin. Forbes ranks Mr. Menard at #44 on their list of richest Americans with a net worth of 5 billion dollars. Even with all of his great wealth, we would need to liquidate the assets of 21,200 billionaires like him to pay for all of the empty promises of our politicians. Unfortunately there are only 793 billionaires in the whole world right now. There goes the “tax the rich to pay for it” theory.
Still unable to fathom just how reckless our politicians are with our money and just how much trouble we are in as a nation? Let’s pare down the government’s numbers to the equivalent of one household’s income and see how that person’s balance sheet would look. We’re going to assume the total U.S. federal tax revenue to be $1,882,673,000,000 (it is constantly moving upward as they take more from us).
The median household income in Wisconsin is $50,578. If this household were as irresponsible with their money as our politicians, they would have spent $88,189 this year; $37,611 more than they earned. This could have been for a new car on a secured loan, a big screen TV on a signature loan, or maybe a nice family vacation on the credit cards. This household would have an accumulated debt of $322,380 for their mortgage, loans, and credit cards. In total, however, this household would be on the hook for an amazing $2,847,689 for such things as time shares, adjustable rate mortgages, balloon payments, appliances with 12 months same as cash, payday loans, introductory interest rate credit cards, and service agreements. If this family’s income remained unchanged, they had no other expenses, and no taxes were withheld from them it would take them over 56 years to pay off the mess they’ve made.
Would you ever allow such a household to manage your money? Of course not. But that household is our government and we do continue to send the same politicians to Washington with predictable results. Social Security is broke. Medicare is broke. Fannie Mae and Freddie Mac are broke. The Post Office is broke. The Fed has printed over 1 trillion (there’s that number again) dollars in new currency. We’re begging the Chinese to buy our debt so we can keep spending. Each man, woman, and child in the U.S. now owes $39,040. So how did we get to this point?
More to come…
Reader Comments (2)
Thanks Ben; This is terribly astonishing. Great article!
Those Bush tax cuts are high on the list. As are an insufficient and inadequate regulatory system (financial, governmental, etc), rewarding high risk, predatory lending practices, greed, and the laissez faire attitude of the general populace.
Obviously the only solutions to the deficit problem involve increasing revenue through taxation of some form and/or printing more money, and cutting spending. Funny how no one truly wants to cut spending OR increase taxes - any politician who actually tries to do so is castigated.