News that the national debt has now topped $13 trillion boggles the mind – and the calculator. I recently posted about the idea that numbers this massive can sometimes feel a little bit like “Monopoly Money” and be difficult to grasp. So, that begs the question; how much is $13 trillion?
If you earned $1, every second, every hour of every day, it would take you 412,227 years to earn $13 trillion. And if you had $13 trillion, you could:
- Purchase a $219,000 single-family home for 59,320,730 million American families.
- Purchase 1 year of public college education (median cost) for 1.85 billion students OR pay for 462 million-plus 4-year degrees, assuming costs stay level.
- Purchase 1 year of private college education (median cost) for 494 million students OR pay for 123 million-plus 4-year degrees, assuming costs stay level.
Americans are often criticized for being too consumerist – for spending too much and saving too little. It would help to compare them to the federal government on matters of spending and debt.
First off, the figure looks like this: $13,000,000,000,000.00. That is a long number, with lots of zeroes, but those aren’t good zeroes. Here’s why.
The “personal savings rate” for Americans is very low, anywhere from 3-6 percent in 2009, as similarly reported by the government. Keep in mind that savings rates among Americans were as low as -1.6 percent in 2006, meaning we spent more than we made on an annual basis through credit. The federal government’s savings rate is sub-zero. Even the money set aside for covering future entitlement obligations such as Social Security payments has been spent, with Congress over the years placing IOU’s in the accounts.
Total U.S. consumer debt as of March of this year – that’s credit cards, car loans and other consumer debt except mortgages – was $2.45 trillion, according to the Federal Reserve. The national debt is more than five times larger than that. According to CreditCards.com, the average American household with credit card debt owes $15,788 on their credit card balances. That’s too high for many Americans, but it is small when compared to the average American’s share of the national debt.
If we divide $13 trillion by the population of the United States, now greater than 309.3 million people, we come up with $42,022. That equals the share of the debt burden that Congress has placed on every American citizen. At $42,022 per person, the $13 trillion national debt is now larger than Americans’ per capita income in the last year: $39,138.
If the government took every dollar that every person in America will earn this year and used it to pay off the national debt, that would still leave in excess of $800 billion in debt. Obviously, mandating that all Americans go on a year-long fast is absurd. But consider the notion that even if every penny of our Income in 2010 were set aside for paying down the debt, there would an $800 billion shortfall. In terms we hear often related to mortgages in America, we are essentially “upside-down” on our future.
Come back Wednesday for what we’ll need to do to fix the situation.