Another year, another manufactured debt crisis by our elected officials
Didn’t we do this whole debt ceiling debate last year? You mean to tell me the United States government was given an extra couple trillion in allowance money and and it managed to blow it all in one place?! According to US Debt Clock, we are coming very close to being 17 trillion dollars in debt. This amount equates to over $50,000 per citizen of the United States and the US Census population clock puts that number at over 300 million people. I think there comes a point where these debt numbers become so large that the average person doesn’t have a clue as to just how enormous they really are. At what point do people who purchase United States debt (bonds) simply stop purchasing? It does help that much of the world’s international trade is done in dollars due to it being the worlds reserve currency, but would it still be the world’s reserve currency if the debt of the United States was at 25 trillion dollars (and growing) instead of 17 trillion dollars? I guess nobody really knows the answer to that question right now, but in the mean time lets have some fun with numbers.
Some fun facts about just how much 17 trillion dollars really is...
1. The population of the world is approximately 7.1 billion people, so instead of having those trillions of dollars as debt we could just give every single living person on Earth a check for around $2,000.
2. According to Wired Science, a stack of one trillion dollar bills would be about 1/4 of the way to the moon. That means 17 trillion one dollar bills would stack all of the way to the moon and back and then to the moon and back again with roughly one trillion dollars to spare.
3. If you use a very rough estimate of how much gold has ever been mined in the history of the world, you might come up with somewhere around 10 billion ounces. If you use current gold prices it would only be about 1/2 of the current United States national debt. (Please remember that these are very rough numbers and not supposed to be serious calculations).
4. If you attempted to count to 17 trillion it would take over 500,000 years to accomplish the task. Yep, that is over 500,000 years if it took you one second per number while counting. Although it might be a little difficult to spit out a random number such as 8,900,127.120,890 (Eight trillion - nine hundred billion - one hundred twenty seven million - one hundred twenty thousand - eight hundred and ninety) in one second. I have the math behind the numbers below.
If you spend 1 second per number it would...
Take you one minute to count to 60 (60 seconds in a minute)
Take you one hour to count to 3600 ( 60x60)
Take you one day to count to 86,400 (24x60x60)
Take you one year to count to 31,536,000 (24x60x60x365)
Take you 31,536 years to count to one trillion (1,000,000,000,000/31,536,000 = 31,709.79 years)
Take you 539,066.43 years to count to 17 trillion ( 31,709.79 x 17 = 539,066.43)
5. According to the Gross World Product page on Wikipedia, the 17 trillion dollars in debt the United States currently has is roughly equal to the entire economic output of every man woman and child on Earth circa 1980.
(The population of the world was estimated to be 4.4 billion in 1980)
The meat of the potatoes
I am not pretending to have any answers (along with every other armchair financial blogger) for how to curb the insatiable spending habits that our federal government has, but I can still complain about it . This goes well beyond blaming one particular political party or President for our debt predicament. One thing is for sure, however, we need to do something about it soon. The problem is that most people agree that government cuts need to happen but they get a bit skittish on what programs should fall under the budget cutting axe.
I guess that both parties need to sit down and hammer out a budget instead of the yearly continuing resolutions that pretty much hide actual government expenditures. They then need to tell the heads of all government departments that they must streamline everything in their departments that they can. I used to be in the Military and have a pretty good working knowledge that there are areas where things could be more efficient and less costly without affecting the mission readiness of the department. The problem is that they are spending someone else's money (the taxpayers) and basically don’t have any personal incentive to spend less.
If people ran their household finances the same way the politicians ran our federal government, we would no longer own our houses. You can’t continue to grow your debt in a manner that far exceeds your yearly income; that is if you enjoy being able to purchase things like clothing and food. Essentially, if you can’t find a way to work within a budget based on how much you make, you will get deeper in debt until you reach the point where no banking institution will give you any more debt to accumulate. The same will eventually hold true for our federal government. I just hope that the government never reaches the point where people are no longer willing to purchase their debt (i.e. the taxpayers obligations).