Charge it!

What do these numbers represent?

  • 1944 $1,021
  • 1952 $1,649
  • 1960 $1,617
  • 1963 $1,626
  • 1968 $1,720
  • 1974 $2,204
  • 1976 $2,528
  • 1980 $3,719
  • 1984 $5,903
  • 1988 $9,723
  • 1992 $14,347
  • 1996 $18,970
  • 2000 $20,545
  • 2004 $24,089
  • 2008 $30,675
  • 2012 $47,492
  • 2016 $56,567
  • 2020 $70,532
  • 2025 $142,825 Projected

Do you notice a pattern? Do you notice relative stability for forty years or so?

These numbers represent the U.S. federal debt per U.S. citizen.

Notice the debt ratio during the height of WWII. Consider that the U.S. population has climbed from 136.7 million at the start of 1944 to 330 million today.

Is the growing federal debt a reflection of societies attitude toward debt?

In the 1940s and 50s credit card debt was practically unknown. Today Americans owe $807 billion on credit cards. Auto loans add another $1.36 trillion. Total debt is $14.35 trillion.

It would appear our politicians and the way they run government is a reflection of how Americans handle their own money, or more accurately someone else’s money.

There is always an excuse. For individuals it’s “I need.” For government, the latest excuse is debt doesn’t matter.

Can you say gluttony? Pray for low interest rates forever.

7 comments

  1. I remember when the federal debt was $800 billion around 1981 when Ronald Reagan beat Jimmy Carter for President. My wife and I bought out first house and the mortgage rate was 14.5 per cent fixed interest on a 30 year loan ($50,000). The highest interest rates in over 100 years. Step forward to today, $28 trillion dollar federal debt, and the 30 year treasury bond yield is 1.87 per cent. If interest rates ever returned to the 4 per cent range, the interest component of the federal budget would be about 1.2 trillion of a 4.8 trillion dollar budget or about 25 per cent. It will never happen. The US will never have long term rates reach anywhere near four per cent again. The Fed is not charged with supporting the value of the dollar.

    I feel sorry for young people trying to buy houses in a Fed induced asset bubble. Some of them believe bitcoin is the store for their hard earned treasure. My own take is diversification of your assets across global growth companies is the best hedge against a falling dollar.

    Liked by 1 person

  2. I tried and failed to look at these numbers in a positive light. $136.7m in 1944 would have been only $2.01 billion in todays dollars. That’s not too bad because we now owe $27.8 trillion or $84,059 per citizen per the US National Debt Clock so I am guessing that your 2020 amount is a little date by a month or two. Either way it is bad.

    Government policies encourage spending to drive the economy as a consumer economy since America doesn’t make anything anymore.

    Economic and political unrest are usually two key factors in a fall of a government or an empire. We are not there yet on the economy but one day, the bill will come due. I just feel sorry for my grandkids. With the cancel culture, I can’t even speak out against it. My vote hasn’t counted in NJ for a long time because I am not a party member but a free thinker. JFK would be upset that people ask “what will the government do for me”.

    Like

    1. Dwayne, America still makes lots of products, but we use debt to fund our economy. Because of tax policy and low interest rates companies use debt instead of profits to fund expansion and stock by backs. Why not, if something goes wrong they can always file bankruptcy. Looking at these debt numbers, it is very interesting from 1944 thru 1984 adjusted for inflation, debt per each citizen was really going down. 1944 – $1021 = $8,784 in 1984 dollars, but 1984 debt was $5,903 per citizen. Enjoy those $2,000 stimulus checks, we will be paying interest on that $2 trillion dollar stimulus package brought to you by the clowns in DC, for years to come. Plus the inflation, who knows were prices will go in the future with over 5 Trillion added to the debt in just 12 months. .

      Like

      1. greglee2014
        Why would you think that the bill will not come due one day? Do you not pay your bills? Do the banks always want their money? Other countries either pay their bills or lose credit from the rest of the world.
        Why wouldn’t the United State have to pay that bill? We can default but that would be a big mistake. China and Japan had own more than 50% of the American debt. Luckily during the trade war, China started selling off some of that debt. To me, it is scary that just two nations may one day be able to dictate terms to the US from a financial basis. Look what the IMF does to poor countries it lends money to.
        The world has been moving away from the US dollar as world’s global currency for the past several years. World trade used to be done in dollars but the world is getting nervous and rather trade in other currencies, such as the euro, yuen, or other assets, such as gold and commodities. The reasons are complex and many, but the point is the world is losing its taste for the America dollar. So what happens when they stop buying our debt and want to cash out?

        Like

      2. Dwayne, Some believe that as long as we keep refinancing the national debt and continue to pay just the interest, things will be ok. They also believe that they themselves will not be the ones paying the higher taxes, in the future. But what they do not realize is we are already paying for all the government debt, in higher prices for goods and services. As government competes in the market palace making purchases with almost unlimited funds, with almost no regard to price, it creates price inflation. Just look at what has happened in College tuition costs, since the government has pushed a policy of low interest guaranteed loans. Or look at the housing market that has inflated prices, because of government policy to push home ownership onto people who cannot afford to buy, or the loan guarantees that put the responsibility of payment when someone defaults onto the taxpayers.

        Like

      3. “Why would you think that the bill will not come due one day?”

        I didn’t say what I thought. Was my question too hard?

        Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s