|Debt in perspective|
They're flat-out false. The only question is whether they believe what they're saying or they're purposefully lying.
Here are the numbers from the census data, the treasury, the fed, and the standard deficit projection:
- Number of households in 2010: 118,682,000
- Mean 2010 household income in 2010 dollars: $67,530
- 9/23/2011 current debt: $14.7 trillion
- Projected 2011 deficit: roughly $1.3 trillion
- Household 2010 net worth: roughly $57 trillion
- Net worth / household: $480,275
- Federal debt / household: $123,861
- Net worth after US debt / household: $356,414 (far higher than median net worth)
- National income / household: $67,530
- Federal deficit / household: $10,954
- Net income after deficit: $56,574 (significantly higher than median income)
- Deficit / income / household: 16.2%
- $356,414 dollars left over if we were to pay all all federal debt from all household net worth today
- 16.2% as the mean increase required to eliminate the deficit with tax increases alone
If you don't believe my numbers, please look them up yourself. If you don't believe these basic calculations, please pull out your calculator or spreadsheet and run them yourself. You'll find the same thing. We could cancel out the deficit if we wanted to. And we could pay off the debt if we really wanted to. That's part of why our debt is an international safe-haven investment at very low interest rates. But there's another side to the story. Do we really want to have no national debt?
|2010 Intragovernmental Holdings|
So far, we've identified roughly $4.6 trillion of debt that we want right where it is. It would be senseless to force ourselves to find alternatives less secure than the full faith and credit of our own government for those holdings.
|Holders of debt, Dec 2010|
What's that leave? The foreign portion, under a third of our debt. That's the part we could seriously consider. That's the part we could pay off without forcing our own govt institutions, companies, and individuals to shift all of their investments into riskier options. But what does that part mean to us? Foreign investments aren't invested in our debt because of attractive rates to them. Quite the opposite; they could easily choose any number of investments with higher rates. But those higher rates all come with more risk. We're the place nations stow cash in case everything else fails, safer than burying it. It isn't about making money off us; it's about making sure they've got enough money socked away where it is more certain to be available than any other option. It's about stability. That means we're issuing debt at very low rates, lower than ordinary inflation. After factoring for inflation, all the world is literally paying us to hold their money safely for them. Why should we turn that down instead of using it to improve our infrastructure and lower our domestic cost of doing business?