The American National Debt-How Big Is It Really?

How Is Your Financial Future?....and your Children's?

The national debt is a term we have all heard about but many of us fail to understand just what this debt is and what its long term effects on our economy and our own personal finances could be.

These days politicians and the self-serving , so called, experts from all sides of the political spectrum discuss and debate this issue constantly. this has not always been the case. For most of the last 230+ years the national debt was the last thing any politician wanted to talk about. As usual each side is trying to blame the other and hoping to convince anyone, who will listen to them, that only "they" can fix the problem and only "their" solution will work if we will just elect or reelect them. Isn't it a bit disingenuous of these characters to ask us to trust them to fix the problem that they and their kind created and are making worse everyday they are in office.

Put simply the national debt is the result of overspending by multiple generations of politicians from George Washington to Barack Obama. All governments, right and left, are guilty. We the citizens also bear responsibility as we, constantly, place demands on our politicians to give us what we want and to gain or retain power most of them do exactly that.. regardless of the cost.

In your own, day to day, life you probably have a mortgage, a car loan and a credit card or two. You make monthly payments and over time....pay off your debts. As the years go by, depending on your employment and financial circumstances, you begin the cycle all over again looking for a bigger house or a newer car.

Loans are made to you based on your income and ability to repay. You only have so much money from your paycheck, after living expenses, and your debt load is, often, tied to your disposable income. Most of us know how much we can afford to take out of our paycheck for a payment and while we may often see things we would like to "have" we know that if the extra money is not there, in our budget, we will have to do without that item. This explanation is oversimplified but for the most part this is the way credit and debt is suppose to work.

The national debt has been with us since the inception of the United States. In 1791 the first President, George Washington, presided over the first occurrence of a national debt in the sum of seventy-five million dollars. It was expensive setting up an independent country. There were a few periods in our history where the debt was "0" but those times were very rare. By the end of the Civil War in 1865 the national debt had reached the three billion dollar mark and climbed rapidly after that.

By WWI the debt had soared past the twenty billion dollar mark and at the beginning of WWII the national debt topped out at nearly forty billion dollars. In 1950 with the aftermath of WWII and the world reconstruction program, mostly funded by the US, the national debt reached a staggering 260 billion dollars. It was clearly out of control but the politicians had found a way to deal with the debt that allowed them to continue spending and running up deficits. They simply ignored it.

From the 50's to the late 1980's a time looked upon, by many, as an era of unlimited growth, excesses , and good times the national debt continued its upward climb and reached 900 billion dollars.

By the time the 80's were finished we had more than tripled our national debt. In 1991 two hundred years after our first recorded national debt of 75 million dollars we were at levels very few could comprehend.....nearly three trillion dollars. Even mathematicians and economists had problems dealing with "trillions" It was a figure so large that most politicians could not relate to it and in most cases consciously chose to ignore it, much like their predecessors had done for nearly 200 years. With the debt and the unimaginable numbers cast aside they chose, instead, to focus on the yearly deficits. That figure was easier to understand, for our severely economically challenged politicians, and more easily used as an election ploy against one's opponent until these also began growing exponentially .

By 2000 the debt reached 5.5 trillion dollars and we will close out the year 2010 with a national debt at 14 trillion dollars and an annual deficit of 1.3 trillion dollars and counting. But just how much money is 14 trillion dollars? Let's take a look.

There are a lot of analogies out there trying to demonstrate how large the national debt is so most of us can appreciate and understand the enormous figures. It is not easy to explain as these are really big....big...numbers. You may have heard the example "if you place 14 trillion 1 dollar bills end to end they would stretch several times around the earth"! Another one is "if you stack $1000 dollar bills on top of each other 14 trillion dollars would make a pile 180 miles high"! There are many more examples but I have heard a couple that are much more to the point and maybe a little easier to comprehend.

The total currency in existence , in the world, is estimated to be about 5 trillion dollars. This total not only includes all of the worlds currency but every one's bank accounts and piggy banks too. Every country and every person..... all the money. When we were children a common child's expression went something like... "I would love to have all the money in the world". Well that, in paper money and coins, adds up to about 5 trillion dollars. The United States national debt is equivalent to "ALL THE MONEY IN THE WORLD" nearly 3 times over. The scary part is this is not a child's fantasy this is the situation we are in and future generations of our families will be saddled with this crushing yoke. Another one I have heard is that while the country is 234 years old the national debt accumulated during the first 231 years has been surpassed by the debt total of the last 3 years. This situation is out of control and if we don't stop spending now our future will be very bleak indeed..

The next time you hold your infant child in your arms and feel the love and warmth that only a parent and child can know ,,,,,,remember this. Your beautiful , wonderful and adorable child so innocent and vulnerable in your arms, so totally dependent on you, this beautiful gift from God ............is already about $50,000 in debt because of the political class that has ruled this nation for more than 200 years.That is your child's share of the national debt at this point in history. If you have 3 children then each of them also owes that same amount....$50,000! You the parents as working tax paying members of society are also on the hook. You and your spouses share is about $120,000 each at this point . The debt has to be repaid and massive tax increases are in your children's, their children, and their children's children's future. Just like your own debt the national debt must be paid and the life styles and future standard of living of future generations of your family will be severely affected by what the politicians are doing today.

There are really only two ways for governments to raise money and pay for programs. They either cut their spending, raise taxes or both. There is no magic formula to resolve this crisis. The Government has spent too much and we have demanded too much out of them. The new twist in this financial crisis is much of our debt is funded by foreign governments. Countries like China, Japan and the UK, not to mention dozens more, hold 4 trillion dollars of our debt in the form of government bonds.

Think of it this way. When you owe your local bank for your mortgage, car loan and credit cards who has greater control over your financial life? You .......or your bank? You give away some of your freedom and choice when you take on debt. There is a saying... "only the debt free are truly free". Countries are no different only the consequences are. For example what if China wants to do something we disapprove of. How strong will our hand be, in foreign policy, when the people we are trying to deter from a particular path are our Creditors? How open would your banker be to your suggestions on how he should be running the bank? Interesting dilemma for the USA isn't it!

So the next time a politician comes knocking at your door looking for your vote you have a decision to make. They will tell you that only their party and ideas can solve the problems of the day and only they can look after what's best for you and your family. All you have to do is vote for them and all will be well. Before you say anything gather your children around you and ask yourself is this person part of the political class that is enslaving your children and the generations to come or not.......you decide but remember your decisions have, potentially, huge consequences.



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Comments 21 comments

American Romance profile image

American Romance 6 years ago from America

interesting, not sure George Washington applies here.


point2make profile image

point2make 6 years ago Author

Thank you for your comment American Romance it is appreciated. You are right George Washington was an exception and had very legitimate reasons for running up the debt. As I said, in the hub, he was building a country and that would have been very expensive. In reality the early administrations that followed Washington kept good reasonable control of the debt. In fact Andrew Jackson reduced the debt to "O" in 1835. It was the civil war that created the first real explosion of the national debt and that trend has continued to this day.


LRCBlogger profile image

LRCBlogger 6 years ago

You are correct but missing something very important. If you look at our 2 largest unfunded liabilities (social security and medicare) you will see our debt is vastly larger than most realize. It is a serious issue that I don't think people fully understand. If we can't come to agreement to reduce our debt, the interest will continue to eat larger and larger portions of our tax revenues, eventually it could collapse our monetary value and we could see a massive collapse in the value of our money. We need people to support our lawmakers to come together and make serious cuts and strategic tax raises.

Great eye opening hub.


point2make profile image

point2make 6 years ago Author

Thanks for the comments LRC. You make some great points.

I purposely left out the unfunded liability portion of the national debt, from the hub, because I felt I would be in danger of losing the point of the hub to the numbers themselves. The public debt of 14 trillion is a difficult concept for all of us but to introduce the Gross Debt which, as you correctly stated, is the unfunded liability or future commitments of the Government such as Social Security and Medicare would have been too much. I felt the numbers would overtake the hub and make it lose the main point which was to help people get some understanding just how much debt 14 trillion dollars really is. I am working on another hub that deals with the Gross Debt and the 110 trillion dollar unfunded liability. I hope you will read it and I would welcome your comments.


LRCBlogger profile image

LRCBlogger 6 years ago

I'll definetely read the next, great hub. If everyone started reading hubs like yours, more people would come together to encourage their members of congress to work together to address the debt. We simply can't afford political games (Example: Obama says we need to cut military spending, GOP says he is weakening the country).

This kind of petty politics needs to be put aside so real conversations can take place. Conversations like "do we need 40k troops in Germany at the cost of $500 mil per year? Do we need to build more expensive nuclear warheads when we already have enough to blow up the earth 100's of times over, etc.


point2make profile image

point2make 6 years ago Author

Great observations LRC and you are exactly right. It is time the people took back control. Those who represent us, in congress, need to be held accountable for their actions or inaction whatever the case may be. This is no longer a matter of petty party politics anymore this is our very financial survival. It is time for political games to end and for our government to get to work solving this mess. There are many places we can save money.The rest of the world needs to step up and assume responsibility for it's own security and the associated cost that the US has borne for far too long.It is time for politicians of all strips to remember who they work for and stop the partisan games and get to work fixing these problems.

The new hub is almost ready and will probably be published tonight or tomorrow. I hope you like it and I hope those who read it will get a better understanding of our present situation. The more people who are aware of what is happening the better chance we have of coming together and finding a solution


jracforr 4 years ago

Politicians do not control peoples appetite, greed or vanity, the individuals do, and until each American restrain himself/ herself, our national debt and our entanglement in foreign wars, will bleed the economy to the point of destruction


point2make profile image

point2make 4 years ago Author

Well said jracforr! You are absolutely correct. While the politicians make the mess, we are in worse, it is ultimately us who must look in the mirror and accept responsibility. We all want the government to cut the other guy's pet project as long as they don't touch ours.


drantolic profile image

drantolic 4 years ago from Vancouver, Washington.

Social Progarms in America started to destory America's future from FDR's instututions of the first programs. In fact even FDR told America that if we would become dependant on them, we would destroy the American concept of independance. ABOLISH IT ALL AND LET SURVIVAL OF THE FITEST SORT US OUT!


point2make profile image

point2make 4 years ago Author

I appreciate your comments drantolic....but I think they are a bit harsh. The measure of any society is how it takes care of the weakest among them. I understand your anger and you make a good point how many have become dependant on the system that was meant to help not provide a way of life. It is, in my opinion, the politicians and ourselves that bear the responsibiltiy and, I suppose, the blame. There is so much abuse of the system and it is magnified when it appears that the authorities are "afraid" to address and correct the situatiion. We need leaders with courage and a backbone who will do the "right" think and find a fair way to protect the needy while punishing the greedy.


Brett.Tesol profile image

Brett.Tesol 3 years ago from Somewhere in Asia

Wow, I love the way you put it so bluntly: The United States national debt is equivalent to "ALL THE MONEY IN THE WORLD" nearly 3 times over!! That is the ridiculous falseness of the current monetary system, it lends way more than it has ... in a sense, money and its worth is fake.

Shared, pinned, up, interesting and awesome.


ib radmasters profile image

ib radmasters 3 years ago from Southern California

The National Debt is now over $16 Trillion.

"The Government has spent too much and we have demanded too much out of them"

Who is this WE you have mentioned?


point2make profile image

point2make 3 years ago Author

Thank you Brett....I appreciate your comments and support. I wish more people were aware of the potential disaster that is in all our futures if we don't get a hold of this monster but I fear too many are not paying attention. Here's hoping for that miracle.


point2make profile image

point2make 3 years ago Author

I appreciate your comment ib radmasters and actually the national debt is, just about now, passing $17 Trillion. The currency fluctuations also add to the debt. The "WE" I speak of in the hub, ib radmasters, is all of "us"!. Collectively we have allowed the political class to purchase our support with various baubles and beads while they continue to destroy our nation. We allowed our greed, and our incredible narcissistic views, to blind us to what they were really doing in their lust for power and wealth. When the dust settles, sometime in the near future, we will search for those responsible for our fiscal collapse. We will point to the politicians and the wall street executives as the "evil ones". We will seek out all those who we believe are responsible for the horrifying consequences of our financial ruin and demand justice. Maybe that will be the "eureka" moment when "we" collectively look in the mirror and realize, for the very first time, that the responsible one is staring back at us and then we will realize that somewhere along the way....."we" ......became THEM!


ib radmasters profile image

ib radmasters 3 years ago from Southern California

point2make

I disagree with the collective we, as only the majority of the we made the politicians that were put in office. The presidential elections in recent times have been just a little more than half of the voters electing the president.

Those that didn't vote for the president or tried keep incumbents to be continually reelected to office are not active WE.


point2make profile image

point2make 3 years ago Author

This is not about "who" is in office or who elected who ib radmasters. This is about a collective population that has been, for many years now, acting like spoiled, selfish, and out of control privileged children. We demand the government give us "everything" while at the same time punishing anyone who dares to stand up and tells us "no"!. This economic mess does not belong in the lap any particular politician or party....they all bear equal blame because of their cowardice. This mess is our own making. We have become a collective selfish society driven by our "wants" and like any child that is indulged by it's parents.......we need "correction" and, in my opinion, that very painful correction is coming......soon!


ib radmasters profile image

ib radmasters 3 years ago from Southern California

point2make

I understand that, and my point is that it is not the whole country just the majority of the voters.

We implies everyone, and it is not everyone.

Unfortunately, the majority is growing in one direction, and that prevents a return to a more intelligent voting pool.


point2make profile image

point2make 3 years ago Author

Sorry ib radmasters your trying to narrow the field of responsibility to "voters" ......and I'm saying it doesn't matter who you voted for or even if you voted....if you partake of the government largess you're just as guilty. We all have "sampled" at the trough whether we realize it or not. The problem stems from those who are drunk on it and "expect" or "demand" that the government "give them stuff"!!! We are all guilty ib radmasters to some extent. We allowed this situation to grow into the disaster it is about to become either by partaking of it or keeping silent about it. Either way, for better or worse, we are all in this together and unless "we the people" are willing to give up our "stuff" the outcome is pretty well set.


ib radmasters profile image

ib radmasters 3 years ago from Southern California

point2make

The voters are the ROOT cause of problems in government because they voted the politicians into office. They could voter them out, and give new candidates a message that the people want change, and what kind of change that that want from them.

We are not altogether, and we are no longer the United States. We are the Red and the Blue States, but to be united we need to be the purple states.

I have no idea what stuff you are talking about in your comment.


point2make profile image

point2make 3 years ago Author

If you do not understand the point of the discussion and the logic of our positions cannot be connected, in some way, then it is time to move on ib radmasters. Thank-you for your responses and, I must admit, I enjoyed this debate very much.


ib radmasters profile image

ib radmasters 3 years ago from Southern California

point2make

I still don't understand your point, while I gave my point and my basis.

Bye

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