The National Debt – What It All Means


Image result for The National DebtThere was big news on the national debt recently. We’ve seen the debt pass the 14 trillion dollar mark in the United States for the first time. It is a staggering number, but what does it all really mean, To understand the numbers, you really have to break them down.
The first thing to understand is the $14 trillion dollar debt figure is a blatant misrepresentation. You probably were already thinking it couldn’t be that high. Well, the bad news is the number actually represents a fraction of what we really face. How can this be, Simple, the government just doesn’t count certain debts. It calls these “unfunded liabilities”. It is somewhat like tallying your net worth, but without counting the mortgage on your home as a debt. Any private citizen or business that used this unique accounting approach would end up in prison, of course, but not our lovely government!
So, just what are the hard numbers these days, Well, the official national debt as I write this on January 8, 20011 is $14,017,034,000,000. The real numbers are, of course, much scarier. Total unfunded liabilities are $112 trillion. Yes, about 9 times the official debt figure. These unfunded liabilities breakdown as roughly $14 trillion owed on social security, $19 trillion on the prescription drug program [thanks President Bush!] and $77 trillion on Medicare. The share of each American of this abomination is a million dollars. Please send in your check today!
The numbers are so large it is really hard to even grasp them. Let’s see if we can try an approach that might help detail the problem we face. The national debt was just over $5 trillion dollars in the year 2000. This means in ten short years, we’ve managed to triple our official debt. Tripled! Consider your personal financial situation. Could you afford to triple your debt, Probably not and neither can we.
The national debt is much like credit card debt. Nobody really likes to talk about it, but it can eat you alive if you don’t take care of it. The fact we have officially passed the $14 trillion dollar debt mark is not good news, but things are even worse when you considered unfunded liabilities.
What will the solution be, Nobody seems to know at this point. That is perhaps the scariest thing.


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