Tuesday, December 07, 2010

True US Federal Debt Passes $71 Trillion...

7 December 2010

This chart (from Jeff Berwick's Dollar Vigilante) of true US federal government debt under GAAP (Generally Accepted Accounting Principles) shows current US debts about 5 times higher than officially stated ($71 trillion):

With a population of about 310 million souls, that means each American (man, woman, child) owes roughly $229,000 dollars on behalf of the federal government alone. As on and off-balance sheet state and municipal debts run about $700 billion (source: New York Times - last week; CATO estimates perhaps 3 times that much), you can add another $2,250 to that. Then there is personal and household debt, which I'm not going to add in to our calculations today - but it is still quite large (roughly $2.4 trillion)!

You get the picture, though.... It's at least $230,000 per individual just to manage government obligations related to money already spent (or promised to be spent)!

Let's assume that half of all Americans are active income earners (155 million Americans were employed in 2008). Well, all they need to pay (after taxes for current government operations and expenses, personal expenses, etc.) is then something over $460,000 or so - apiece. I'm just ballparking it here...

So how does this get paid off?

You guessed it, by currency devaluation or default.

Take your pick!

I'm investing in gold!

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