Fun With Numbers

Let’s have some fun with numbers.

According to the official figures, the national debt currently stands at $14.01 trillion dollars. That’s more than $45,000 per citizen, or almost $127,000 per taxpaying American. If you add in debt held by households, state and local governments and financial institutions, that number (the total US debt) blows out to well over $55.5 trillion, or more than $680,000 per average family. How much in savings does the average family have to offset this amount? $7,918.

“Now just hang on a second,” we hear our fellow reckoners moan, “wasn’t this supposed to be fun with numbers?”

Wait for it…

Letting these figures run for a few years, based on their current trajectories, we see that, in 2015, the national debt explodes to over $22 trillion dollars. Per citizen, we’re now looking at close to $70,000, or $184,000 per taxpayer. Total debt, as measured above, has now grown to over $63 trillion and the average family’s share of that stands at nearly three-quarters of a million dollars. Average savings per family, by the way, have now fallen to just $2,791.

And this doesn’t even account for unfunded liabilities, which are growing like mould on cheese. According to Professor Laurence Kotlikoff’s estimate, total US off-budget and on-budget debt comes in at more than $200 trillion. We’ll leave you to do the math on everyone’s share of that one.

Of course, by the time you read this, these numbers will be yesterday’s news, new and larger ones having taken their place.

So where’s the fun, you ask? Where are the rib-ticklers, the knee-slappers and the side-splitters?

Glad you asked.

With the national debt currently standing at $14.01 trillion, the US is just weeks away from busting through its so-called “debt ceiling” of $14.29 trillion. As usual, politicians have gone out of their way to miss the point entirely. Earlier this week, Treasury Secretary Timothy Geithner wrote a letter of concern to Congress. You might expect it to contain a desperate warning about how grossly enlarged the debt had become. Not quite.

Geithner’s letter, instead, warned of the “catastrophic consequences” of not raising the debt ceiling! Consequences, said he, which “would last for decades.”

Right, because the consequences of running up gargantuan deficits against your global competitors never carry lasting consequences. The problem, apparently, is that America doesn’t have enough debt. She obviously needs room to accrue more, to really hit her gluttonous stride. Just look at all those nations throughout history that have successfully borrowed their way to prosperity! There’s…um…er…hmmmn….

The letter continues, “Never in our history has Congress failed to increase the debt limit when necessary.” Gee, could that be part of the problem?

Are you laughing yet, Fellow Reckoner? No? What a wonderful comedy this would be…if it weren’t so darned tragic.

In response to Geithner’s letter, Agora Financial’s executive publisher, Addison Wiggin, penned his own letter to Congress. We urge you to read it, here.

Joel Bowman
for The Daily Reckoning

The Daily Reckoning