Tag Archives: debt

Poor Us!

I’ve mentioned before that at our house, when I was growing up, we sometimes were admonished with quotes from The Bible that were actually from Benjamin Franklin’s “Poor Richard’s Almanac.”  One such example may be this: “Neither a borrower nor a lender be.”

Wherever it came from, it is stunningly good advice.  Not buying something until you have the money for it provides delayed gratification, and a deeper appreciation for what we have.  Not loaning to friends and family helps keep relationships good.

Of course, few people have the resources to buy a home or a car without borrowing money.  But, it’s true too that many people buy as nice a home or car as they can, based on the maximum amount the lender will let them borrow.  That puts a lot of pressure on a family.

Our national family borrows a lot of money.  I looked at http://www.usdebtclock.org/ today to see how we’re doing in the borrowing department as a country.  Frankly, it’s not looking very good.

Keep in mind that the numbers fly by pretty fast, and change every second, but here are some I picked out for your reading pleasure:


US National Debt: $18,385,961,800,000.  That’s 18 trillion dollars, and growing every second.

US Debt Per Citizen:


US Debt Per Taxpayer:


Total Personal Debt:


Personal Debt Per Citizen:


Unfunded Liabilities:


Unfunded Liabilities Per Taxpayer:



Unfunded liabilities are the money we’re going to have to spend on Social Security and other entitlements at some point, but which we don’t have.

As a frame of reference, the total net worth of the top 400 billionaires in the entire world is only $4.1 trillion.  Taxing the rich is a nice slogan, but they don’t have enough money to bail us out of the mess we’re in.  Not even if we take everything they have from all the rich people in the world.

So, what do we do?  Well, we can cut back on our personal debt to bring some peace of mind.

For the national debt problems, when politicians talk about all the things they’re going to do for us – at least those things that involve money – keep in mind that we are really, really broke.

Eventually there will be a reckoning, for us, for our children, and our grandchildren.  The lenders will be unwilling to lend us more, or if they do, it will be at very high rates, and cost us even more.

Unfortunately, talking about these budget issues is very risky for politicians, because nobody wants to give up anything we get from Uncle Sam.

Maybe, just maybe, it is time for us to ask what we can do for our country instead of asking what more our country can do for us.


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Debt Clock Fun

Once a year or so I visit the web site called http://www.usdebtclock.org. If you are prone to seizures or dizzy spells, it’s probably best not to go to this site, because there are a lot of numbers flying past at varying paces.

Anybody who is paying even a little attention to current events knows that our country has a big national debt, fueled by continuing annual deficits. Writing about numbers isn’t exciting, and reading about numbers is worse, but that doesn’t mean we shouldn’t take a spoonful of number medicine now and then.

The debt clock is interesting, at least to me, because of all the data made available. On the main page there are around 70 different statistics, all changing constantly. For example, at 10:33am on Monday, the US population was 315,847,921. Because people are born and die all the time, partly offsetting each other, the population number goes up fairly gradually, at around three people per minute.

The national debt number goes up a bit more quickly. The numbers fly by so fast that the ones, tens, hundreds, thousands, and ten-thousands columns can’t be focused on. If you have good vision and a nimble mind, you can track the hundred-thousands as they increase faster than one per second.

For the sake of simplicity, let’s just say the national debt is around $16,815,280,000. That’s $53,250 per person. But wait! The debt clock site also shows us that 113,577,000 people out of the 315 million pay federal income tax. That’s about 36% of the people in our country. So, for actual taxpayers, the debt per person is $148,059.

Remember the sequester cuts? They amount to the equivalent of less than 2.4% of spending. Those cuts, by the way, weren’t cuts, but rather a slowing of the rate of increase in spending. Also noted is that the tax increases for 2013 amount to 6.2% of spending.

Other interesting numbers include what we each owe in our own lives, and that is about $51,000 per person. If you figure in mortgages and car payments, I guess that’s about what you’d expect, though that means we’re paying lenders a lot to use their money.

So, all of this may be shocking or not. Big numbers are thrown around every day. Here, though, is a really big number that, had I been standing when I read them, would have made me sit down: Between Medicare’s, Prescription Drugs’, and Social Security’s unfunded liabilities, meaning money we don’t have, and won’t have, but are obligated to spend, the total is… drumroll please… $123,946,434,000,000. Once again, the numbers fly by too fast to focus on the lowest six columns. That’s $124 trillion dollars. And, that’s also over $1 million per taxpayer.

When I was a kid, the only people who had reason to use the term “trillion” were astronomers who were talking about how far away the stars are. The website http://www.thewisdomjournal.com says that one trillion seconds is equal to all of recorded time – 32,000 years. That means our unfunded liabilities, in seconds, would take us back almost 4 million years.

Personally, I’m counting the seconds. And, my, how time – and the national debt clock – flies!

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Business As Usual

If you were charged with the task of emptying a bathtub full of water with a teaspoon, you’d probably say that it is impossible, even though your intellect would tell you it can be done.  It would take a long time, but you could empty that tub, one spoonful at a time.

Debt is like that, isn’t it?  We get ourselves into debt, and it looks insurmountable, but if we chip away at the little things, we can bail out our tub of debt.  Dave Ramsey, the radio and TV program host, deals daily with people who want to get out of debt.  He has a plan for how to do that, but only people with resolve can make the plan work.  All they need is that spoon.

The nation of Greece has been in the news for a while because of their debt.  The world community just “helped” them with another trillion dollars in debt.  We were responsible for a fair amount of that loan, even though we don’t have any money.  Greece is like a family that has been living on credit for decades, and living a fine lifestyle.  Retirement at 53, healthcare provided, one in five citizens working for the government.  It was nice, but they couldn’t afford it.  And, unless they grab that spoon, they’ll never repay their debts, but rather default, leaving the people and countries who loaned them the money holding the bag.

Spain, Portugal, France, and in fact, most Western European nations aren’t too far behind.  California is also on the precipice.  In fact, Wisconsin’s financial picture is pretty bad, too. 

The two approaches to solving debt crises are to cut expenses or raise income.  In a family, adding more income can happen by getting a part-time job or two.  Cutting expenses may start by downgrading to a more affordable car, living without cable or satellite TV, and staying away from restaurants.

Governments struggle with both strategies.  Raising taxes is not only politically difficult, but has been proven to reduce tax revenue.  Presidents Kennedy and Reagan proved that reducing taxes brings in more money to the treasury.  Even a profligate spender like the most recent President Bush reduced our budget deficit to 1% of GDP after his across the board tax rate cuts.  Raising taxes inhibits those who have the money to invest from taking risks with their money – risks like starting a business or, if they have one, adding employees.

Cutting budgets is also difficult.  Everyone who is getting money from a government entity will fight really hard to keep it.  It’s human nature.

While traveling through Wisconsin the other day, thinking about our state’s financial mess, I drove into a new rest stop on Interstate 90/94/39.  It replaces a smaller rest stop that seemed to be perfectly good.  The new rest stop – and its twin on the other side of the highway – is architecturally beautiful.  It is three stories high, though the second two levels are only for looks.  It is made of brick and stone, and it is clear no expense was spared.

These new rest stops may have been planned when the economy and our budget was better, but I wonder if anyone with a spoon thought that maybe delaying those building projects until we could afford them would be a good idea.  Some of the money probably came from the federal government.  But wait!  The federal government is way more broke that Wisconsin is.  Any money the feds spend is money they don’t have.  Picture a gigantic Visa card, and some poor schlub making the minimum payments each month.  That’s us!

Interestingly, in a state that is home to a number of paper companies who are struggling, the state also took out all the paper towel dispensers in favor of more politically correct electric dryers.  That might not cost any paper company jobs, but it sends a message that our state doesn’t support the use of paper.

Anyway, thinking about Greece at a rest stop in Wisconsin leads to thoughts like these.  I just hope we find some spoons before our tub overflows.

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