|An examination of debt in America
How much would one person have to save in order to be able to pay off our existing national debt?
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As seen from the Heritage Foundation report this morningÖ (Heritage Foundation report)
ďThe public national debt--$5.8 trillion as of 2008--is projected to double by 2012 and nearly triple by 2019. Thus, America would accumulate more government debt under President Obama than under every President in American history from George Washington to George W. Bush combined.Ē
This made me start thinking about how long would it take for one person to save enough to pay off the debt we have right now. Not even thinking about if it doubles or triples, but how much would one person have to stuff away in a savings account in order to be able to pay off the debt todayÖ and how long would he have to do it?
So letís start with the entire known history of the UniverseÖ 15 billion years. A man born during the Big Bang would have to save $384 dollars a year in order to be able to pay the current debt of the United States. Not too bad, most people should be able to sock away $384 over the course of a year. Although the dollar wouldnít be invented for some time, and we are not taking into account inflation or interest in this analysis, but it sounds doable in 15 billion years.
How about if someone started when the Earth was a rolling burning mass of lava, just starting to form about 4.5 billion years ago? Even before the Moon impacted the proto-planet and spun off into our orbit. Well, someone would need to save about $1,288 every year in order to be able to pay off our debt. Still seems doable, although any dollar bills would vaporize pretty quickly. If some thrifty investor was planning on saving enough, they might want to look at using a bank in another solar system or galaxy.
650 million years ago, Jelly Fish first began to form in the oceans. If a brand new jelly fish wanted to pay our debt, it would need to save $9,666.66 every year.
What if a Dinosaur wanted to pay the debt and started saving 250 million years ago? $23,200 a year.
What if the first humans, the Neanderthals were able to conceive of the giant debt we would run up, and wanted to help out starting around 200 thousand years ago? Well, he would need to save $29,000,000 (29 million) dollars a year, which would be hard, because the wife he just clubbed over the head is going to want a nice present to make up for the big lump on her undersized cranium.
The first cities started showing up about 6,000 years ago. What would a guy from Africa or Egypt need to save in order to be able to pay off the debt? $966,666,666.66 (967 million) per year.
And lastly, America was founded back in 1776. So letís say George Washington found the fountain of youth, and decided he would take care of America for another 233 years. In order for George to pay off our debt, he would have to save $24,892,703,862.66 (almost 25 billion) a year. (Or $68,199,188.66 Ė 68 million dollars a day)
Iím just trying to find a creative way to put the amount of money we owe in perspective. I think when people start throwing around numbers in the trillions, it just becomes too big for the average person to comprehend what that really means. When you consider the entire Universe is only 15 billion years old, and humans have only been around for the last 200 thousand years (1 ten millionth of the entire time) it makes a few trillion here and there seem like a much more staggering figure to me.
Now the above figures are just the current debt. Imagine doubling or tripling those figures. At a triple, that would mean George Washington would need to save 75 billion dollars a year over the last 233 years. Iím sure he could auction off his portrait, but I donít think he will be getting that much for it.
So, what is the debt anyway? Well, itís a combination of money we have borrowed from other countries and from our own citizens. Every time you buy a treasury bill, you are helping finance the government, in exchange for a set amount of interest to be paid back over the years. Even at just 3% interest, we have to pay an additional 174 billion dollars a year just to keep even with our outstanding credit. Triple that, and we will be paying out 522 billion dollars a year, just in interest. Just to keep the people happy that we borrowed money from years ago in order to pay for something that day. The government just enacted an 800 billion dollar stimulus package, which was supposed to be enough to rescue our entire economy, but at the same, we are on track for owing almost that much in interest in ten years.
When I write a bad check, I get sent to jail. When the government writes a check it canít cash, it sells bonds, then passes on the interest to all of us in the form of inflation and higher taxes. The entire economy was caught up in a spending spree, and now we are paying for it, but the government continues to spend like the citizens did. I donít have the power to demand money from my neighbor like the government does. Nothing good can come of this down the road. And thatís before Social Security and Medicare go bankrupt.
Start saving as much as you can now, because no matter how much we want the government to take care of anything and everything that could present a problem in our lives, ultimately, we will be taking care of ourselves when the time comes to retire. We already owe $19,075 per person alive in the USA to cover the debt. Triple that, and we will all of us, and that includes your nephew who was just born yesterday, owe $60,000 the day we are born. And someday down the road, someone named Leo, or Vinnie, or Bob, or Obama is going to come snooping around with a night stick in his hands, looking to collect.