The National Debt

The United States is in debt. We owe a little over $19.5 trillion dollars today. That is a lot of money, but is it a big deal? Well to put it into perspective the entire production of the US economy or Gross National Product (GDP) per year is estimated to be $18.5 trillion dollars for this year. That puts our debt at 105% of our GDP. That's a lot. However, the whole economic output of the US isn't what the government's income is. Total federal government tax receipts for last year was $3.3 trillion dollars. That means the government's debt load is 590% of it's yearly revenue. That is a bit more. Another bit of information is that the government spent $3.7 trillion last year creating a deficit of $438 billion.

Those are big numbers that look scary, but are hard to really understand. Let's scale them to an average household income. The US median income for 2015 was $51,939. Let's lay out the numbers.

If the US were an average family:
Income: $51,939 per year
Debt: $306,912
Debt Added: $7000 per year

That is not a recipe for financial solvency. It is a terrible situation in fact. Most people in that situation would be looking at bankruptcy. Unfortunately the US probably doesn't have that option. The reason being that we are so big if we tried to do that the world economy would collapse. It would be a very bad day for everyone.

So what do we do? If we do nothing and continue on this course the world economy will collapse anyway. Eventually the payments will get so big we won't be able to handle them. We are currently only paying interest and even then it is 12.7% of the entire government revenues. Maybe we can keep it up for a while, but not forever. So again, what do we do?

Pay it off. Let's nominate Dave Ramsey as the Secretary of the Treasury and put a plan in place to get the country out of debt. Let's make a goal to be out of debt in time for our country's 250th birthday in 2026. Let it be our moon shot.

P.S. To give you scale, the national debt evens out to be $61,147 per PERSON or $167,798 per HOUSEHOLD.