The ridiculously large dollar amount above is an up-to-the-minute count of national debt that must be periodically refinanced by the U.S. Treasury (debt clock courtesy of Ed Hall).
U.S. 2009 gross domestic product was $14T, which means that our debt is more than the value of all of the goods and services that we produced in 2009, putting the U.S. behind only Japan of the large industrialized nations in debt as a percentage of GDP.
It will cost us, as a nation, about $500B in the 2009 fiscal year to meet the obligations of this debt.
Currently, the U.S. population is about 350M and the per capita share of our national debt is about $35,000. The per capita share of the annual interest payment on the debt is about $1,650.
However, not everyone generates tax revenue that the Treasury can use to help maintain the debt burden. Based on 2004 data, there are 131 million tax filers, of whom 43 million owed no tax. At current levels, our national debt is over $120,000 per taxpayer and the annual interest payments are $5,700 per taxpayer.
Of course, this $5,700 excludes expenses for things like social security, medicare, infrastructure, national defense, etc. (click here for a graph), which explains why the Congressional Budget Office forecasts budget deficits of over $430B in each of the next two years, or $1.4T between 2009 and 2013.
Based on the CBO predictions, the federal budget will not be in balance for any of the next ten years, and the total national debt in the year 2018 will be nearly $13T, or about $148,000 per taxpayer (again, using 2004 data), and the interest on that debt will cost each taxpayer about $7,000/year, assuming that the interest rate on Treasury debt does not exceed 4.7%.
However, the CBO is basing these deficit estimates on a projected 5.2% annual growth in nominal GDP, estimates that currently appear to be absurdly rosy. For example, the International Monetary Fund predicts nominal GDP growth for 2008 and 2009 in the U.S. of less than 0.5%. Additionally, Goldman Sachs predicts U.S. GDP to drop 5% in the fourth quarter of 2008 and be flat to slightly down in 2009.
What this means is that, with GDP growth flat to non-existent, the U.S. government engaged in vigorous rounds of Keynsian economic stimulus, and unemployment headed toward 9%, we can expect the U.S. national debt to start climbing at a new, exponential rate. How long this trend can continue before the U.S Treasury starts having problems finding buyers for its debt is anyone's guess.
Finally, it is not clear that the trillions of dollars of stimulus spending and loan guarantees are included in the current debt estimate on which I am basing these calculations, so the actual debt numbers could be up to $7T higher!
P.S.
If the amount of the U.S. debt is distressing to you and you would like to do something about it, you can send a check to the U.S. Government which will be used to reduce the national debt:
Make your check payable to the Bureau of the Public Debt, and in the memo section, notate that it is a Gift to reduce the Debt Held by the Public. Mail your check to:
Attn Dept G
Bureau Of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188
U.S. 2009 gross domestic product was $14T, which means that our debt is more than the value of all of the goods and services that we produced in 2009, putting the U.S. behind only Japan of the large industrialized nations in debt as a percentage of GDP.
It will cost us, as a nation, about $500B in the 2009 fiscal year to meet the obligations of this debt.
Currently, the U.S. population is about 350M and the per capita share of our national debt is about $35,000. The per capita share of the annual interest payment on the debt is about $1,650.
However, not everyone generates tax revenue that the Treasury can use to help maintain the debt burden. Based on 2004 data, there are 131 million tax filers, of whom 43 million owed no tax. At current levels, our national debt is over $120,000 per taxpayer and the annual interest payments are $5,700 per taxpayer.
Of course, this $5,700 excludes expenses for things like social security, medicare, infrastructure, national defense, etc. (click here for a graph), which explains why the Congressional Budget Office forecasts budget deficits of over $430B in each of the next two years, or $1.4T between 2009 and 2013.
Based on the CBO predictions, the federal budget will not be in balance for any of the next ten years, and the total national debt in the year 2018 will be nearly $13T, or about $148,000 per taxpayer (again, using 2004 data), and the interest on that debt will cost each taxpayer about $7,000/year, assuming that the interest rate on Treasury debt does not exceed 4.7%.
However, the CBO is basing these deficit estimates on a projected 5.2% annual growth in nominal GDP, estimates that currently appear to be absurdly rosy. For example, the International Monetary Fund predicts nominal GDP growth for 2008 and 2009 in the U.S. of less than 0.5%. Additionally, Goldman Sachs predicts U.S. GDP to drop 5% in the fourth quarter of 2008 and be flat to slightly down in 2009.
What this means is that, with GDP growth flat to non-existent, the U.S. government engaged in vigorous rounds of Keynsian economic stimulus, and unemployment headed toward 9%, we can expect the U.S. national debt to start climbing at a new, exponential rate. How long this trend can continue before the U.S Treasury starts having problems finding buyers for its debt is anyone's guess.
Finally, it is not clear that the trillions of dollars of stimulus spending and loan guarantees are included in the current debt estimate on which I am basing these calculations, so the actual debt numbers could be up to $7T higher!
P.S.
If the amount of the U.S. debt is distressing to you and you would like to do something about it, you can send a check to the U.S. Government which will be used to reduce the national debt:
Make your check payable to the Bureau of the Public Debt, and in the memo section, notate that it is a Gift to reduce the Debt Held by the Public. Mail your check to:
Attn Dept G
Bureau Of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188
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