Friday, July 10, 2009

A word about debt

In 1860, the federal debt was $65 million (in today's money). The Civil War took it to over $2.7 billion, or $2700 million: a forty-fold increase. World War II only brought it up 5x, from $51 billion to $260 billion. Nixon and Carter brought us up to shake hands with a trillion dollar deficit ($900 bill). Reagan&Bush brought us up to a trillion (3 of them actually), Clinton nearly doubled it ($5.7 tril), Bush II added another 3 tril ($9 tril), and Obama has pledged to double it by 2014. Add to it consumer debt of $2 trillion in 2003.

For at least the last 30 years, a favorite game has been to remind people just how much these numbers mean. Let's have another round!

How big is the debt....

as a Pyramid scheme?
10,000,000,000,000 --- We got our 13th zero some time this year.

as a pile of $1 bills?
It would stretch from earth to the moon three times over.

in seconds?
320,000 years.

as a Road Trip?

per person?
$30,400 is your share as of Feb 2008. Put it at about $33,000 now.

(Hat tip Donald Marron, former CBO head)
From Oct2007-June2008 we had a $286 billion dollar deficit. It's grown to $1 trillion this year already as tax revenues fell 18% and the TARP, bailout, and stimulus funds kick in.

That's what we've already added to the debt this year so far. 11% growth in 3/4 of a year with a pledge to spend 500 billion more.

The debt increases by a trillion dollars as far as the eye can see.

And that's before Medicare, Social Security, National Health Care, and other entitlements ratchet up when the boomers retire.

J. Reuben Clark - "Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you."

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