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On my last post, I made an error in reporting who owns the federal debt, and I apologize for any confusion it may have caused. I originally reported 86 percent is owned by and owed to Americans. Here are the correct facts:
The total public debt as of 8/1/2011 is $14.3 trillion or $46,708 per U.S. citizen. It is higher than the total value of China's, the United Kingdom's and Australia's economies together. Our national debt is growing by $3.5 billion per day or $2 million per minute.
Only 32 percent or about $4.6 trillion is owned by the federal government (intragovernmental holdings) as IOUs for Social Security, federal pensions, etc. About $3 trillion is owed to Social Security and the Federal Reserve Bank holds about $2 trillion.
About $5.3 trillion or 37 percent are private holdings by American investors, corporations (especially banks and pension funds), and holdings by state and local governments.
The remaining $4.4 trillion or 30 percent is owned by foreigners. China owns 8 percent of our debt or about $1.2 billion. This makes the Chinese the third largest holder of U.S. debt. Only the Social Security Trust Fund and the Federal Reserve Bank hold more.
Therefore, about $9.9 trillion or 69 percent, not 86 percent, of the national debt is owned by and owed to Americans.
Sources used include: http://usgovinfo.about.com/od/moneymatters/ss/How-Much-US-Debt-Does-China-Own.htm http://www.usdebtclock.org/
http://www.treasurydirect.gov/NP/BPDLogin?application=np
http://www.fms.treas.gov/bulletin/index.html
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
http://www.defeatthedebt.com/
Showing posts with label national debt. Show all posts
Showing posts with label national debt. Show all posts
Wednesday, August 3, 2011
Monday, August 1, 2011
Picturing the National Debt
The website http://usdebt.kleptocracy.us/ has created a series of graphic images of what our current and future national debt looks like. I highly recommend taking a look at it. It helps one understand what is facing us or, more accurately, our children, if we do not get our national spending under control.
One hundred million dollars, stacked, would be a pallet-load on a standard shipping pallet. It would stand about chest high on an average size man. Still, it is a trifle compared to our debt.
One billion dollars would require ten $100,000,000 pallets. Although more impressive, it is still a drop in the bucket.
Now, take 20,000 of those $100,000,000 pallets and stack them double-high. To equal a trillion dollars, you would fill a football field with double-stacked pallets. In 2010, the U.S. government racked up a deficit of $1.7 trillion or one-and-a-half football fields of double-stacked pallets.
The total national debt for 2011 is projected to total $15 trillion, "20% of the entire world's combined GDP (Gross Domestic Product)" and more than 100% of the value of all goods and services (GDP) produced in our country. To equal $15 trillion, take these $100,000,000 pallets and stack them 60 pallets high, and then fill two football fields with these 60-pallet stacks. If the Statue of Liberty was placed next to the them, the stacks would reach chest-high on Lady Liberty.
Now, if you are not depressed and distressed enough, take a look at our nation's unfunded liabilities. To fully fund the Medicare, Medicare Prescription Drug, Social Security, Military and federal civil servant pension plans as currently structured would require -- are you ready? -- $114.5 trillion dollars. (This figure does not include Obamacare, by the way.) A single layer of our double-stacked pallets would equal $1 trillion dollars so the total would soar to 114-1/2 layers high, well over the tops of the fallen World Trade Center towers, almost three-quarters higher than the Empire State building, and higher than the 1,976-story Freedom Tower under-construction at Ground Zero. That is how much $114,500,000,000,000 is.
It is easy to depersonalize these numbers. We say, it is the government's debt or it is owed to others, such as China and other countries. Some say the national debt does not concern or effect them. Well, these facts may surprise you:
Who is the government? "We the People of the United States" are the Constitution's first words. The U.S. government is not some disembodied entity. It is you and me together; we are the government. Thus, the national debt is our debt. We owe it. And, it may surprise you, but most of it -- about 86 percent -- is owed, not to other nations, but to ourselves. Government agencies borrow and lend to one another. In other words, we take money from one of our hands and give it to the other.
For example, you have probably heard about the "Social Security Trust Fund." The naive think this is some kind of special savings account set up by the government to protect the funds received from our paycheck withholdings until they are needed when we retire. The sad truth is all of those funds -- every single dollar of it -- has been lent back to the federal government to be included in the general revenues used to pay all the government's bills. It is not reserved to pay just Social Security claims, as many falsely believe. The so-called Social Security Trust Fund is just a stack of IOU's (government bonds) from the U.S. Treasury. These bonds are a promise to you that you will pay yourself back sometime in the future when you need the funds. The same is true for most of the other unfunded retirement promises owed to veterans and federal pensioners. Can you spell P-O-N-Z-I scheme?
For additional information, go to www.USdebtclock.org.
One hundred million dollars, stacked, would be a pallet-load on a standard shipping pallet. It would stand about chest high on an average size man. Still, it is a trifle compared to our debt.
One billion dollars would require ten $100,000,000 pallets. Although more impressive, it is still a drop in the bucket.
Now, take 20,000 of those $100,000,000 pallets and stack them double-high. To equal a trillion dollars, you would fill a football field with double-stacked pallets. In 2010, the U.S. government racked up a deficit of $1.7 trillion or one-and-a-half football fields of double-stacked pallets.
The total national debt for 2011 is projected to total $15 trillion, "20% of the entire world's combined GDP (Gross Domestic Product)" and more than 100% of the value of all goods and services (GDP) produced in our country. To equal $15 trillion, take these $100,000,000 pallets and stack them 60 pallets high, and then fill two football fields with these 60-pallet stacks. If the Statue of Liberty was placed next to the them, the stacks would reach chest-high on Lady Liberty.
Now, if you are not depressed and distressed enough, take a look at our nation's unfunded liabilities. To fully fund the Medicare, Medicare Prescription Drug, Social Security, Military and federal civil servant pension plans as currently structured would require -- are you ready? -- $114.5 trillion dollars. (This figure does not include Obamacare, by the way.) A single layer of our double-stacked pallets would equal $1 trillion dollars so the total would soar to 114-1/2 layers high, well over the tops of the fallen World Trade Center towers, almost three-quarters higher than the Empire State building, and higher than the 1,976-story Freedom Tower under-construction at Ground Zero. That is how much $114,500,000,000,000 is.
It is easy to depersonalize these numbers. We say, it is the government's debt or it is owed to others, such as China and other countries. Some say the national debt does not concern or effect them. Well, these facts may surprise you:
Who is the government? "We the People of the United States" are the Constitution's first words. The U.S. government is not some disembodied entity. It is you and me together; we are the government. Thus, the national debt is our debt. We owe it. And, it may surprise you, but most of it -- about 86 percent -- is owed, not to other nations, but to ourselves. Government agencies borrow and lend to one another. In other words, we take money from one of our hands and give it to the other.
For example, you have probably heard about the "Social Security Trust Fund." The naive think this is some kind of special savings account set up by the government to protect the funds received from our paycheck withholdings until they are needed when we retire. The sad truth is all of those funds -- every single dollar of it -- has been lent back to the federal government to be included in the general revenues used to pay all the government's bills. It is not reserved to pay just Social Security claims, as many falsely believe. The so-called Social Security Trust Fund is just a stack of IOU's (government bonds) from the U.S. Treasury. These bonds are a promise to you that you will pay yourself back sometime in the future when you need the funds. The same is true for most of the other unfunded retirement promises owed to veterans and federal pensioners. Can you spell P-O-N-Z-I scheme?
For additional information, go to www.USdebtclock.org.
Sunday, February 15, 2009
Goodbye, America
America, as we know it, ended late Friday night, February 13, 2009. When the Senate passed the American Recovery and Reinvestment Act of 2009, it plunged the knife up to the hilt into the heart of American capitalism. For all intents and purposes, our financial system and economy have been nationalized.
When President Barack Obama signs this so-called stimulus package into law on Tuesday in Denver, America will become officially a socialist or, more accurately, a fascist nation. Even if businesses remain in private ownership, the federal government will control their operations. In many cases, the government itself will take over majority ownership.
Of course, it is no surprise. Socialists and communists have mentored Obama since his teens. Nor can he bear total blame for this end of American capitalism and financial freedom. We have been on this road for a long time, since President Lyndon Johnson’s War on Poverty and President Franklin Roosevelt’s New Deal. Republicans, too, share blame. Never in my wildest dreams [or nightmares] would I have believed that a Republican President, George W. Bush, would nationalize the banks like he did by signing the first “stimulus” package that was rushed through Congress last Fall.
All sides acknowledge, now, that package did not work. Did Congress learn from that hasty mistake? Obviously, it did not. Most Democrats and a few Republicans stubbornly believe, despite all historical evidence to the contrary, that it is possible to spend our way out of recession. They often cite the example of FDR’s New Deal, forgetting that World War II, not the New Deal, lifted this country out of the Great Depression.
Analysis of this legislation has just begun. The Act, which spends $787 billion, is 1,071 pages long. Legislators had only fifteen hours to digest it before the vote. It is safe to say not one single Congressman or Senator read this bill before voting on it. They would have to have read 71 pages per hour or just over one page per minute, without any breaks during those fifteen hours. Previously, Speaker Nancy Pelosi had promised they would have at least 48 hours between release of the bill’s text and the vote being taken. And, it was only released in printed form. Normally, bills are published digitally, which allows Congressional staffers to do computer keyword searches to evaluate the worthiness of any piece of legislation.
The devil will be in the details. Supporters claim this act will create 3.5 million new jobs. Most economists put the number lower, at 2.5 million. But, let’s give the Democrats the benefit of the doubt and go with the 3.5 million number. That means it will cost $224,857 in government spending for each one of those jobs. Let me say that again so its truth can sink in: every single new job created by this stimulus act will cost taxpayers $224,857!
The press, both left and right, is finding all kinds of funky features buried in this bill. Some are silly, like the millions to save some endangered mouse in Speaker Pelosi’s district. Although maddening, voters should not let themselves be diverted by these trifles. This bill is too dangerous at the macro-level for us to be consumed by such micro-details.
The most alarming fact about this stimulus act is how much it raises the statutory limit on the national debt. It allows the national debt to increase from its current limit of $789 billion to $12.1 trillion. Think about it. We have never had a national debt over $1 trillion, yet the Democrats and three “Republicrats”voted for our nation’s credit line to go to a mind-boggling $12.1 trillion.
So far, the media has barely noticed this all-important detail. Yet, it is perhaps the most dangerous provision. What does it mean to allow such an increase in our national debt limit? It tells us just how much spending the Democrats are planning to do. This $787 billion must be just a down payment.
If the Democrats under Obama pass the kind of spending a $12.1 trillion national debt limit allows, it means hyperinflation. Even the U.S. with its sterling international credit rating cannot borrow that kind of money. There simply is not that much investment money in the entire world to support that kind of spending. And, some international bankers are expected to lower our nation’s bond ratings. That means higher interest rates on what we are able to borrow. If we cannot borrow the money to support our spending at reasonable rates, the government has one other option and that is to print money. It monetarizes the debt, lowering the value of the dollar so that high value dollars borrowed are repaid with lower value dollars.
This is what President Carter did in the early eighties when we had the worst recession since the Great Depression. We had double-digit inflation in a stagnant economy. If we come even close to a $12.1 trillion debt, we will have triple-digit inflation. We will be like the Germans during the Weimar Republic before Hitler. Then, it took a wheelbarrow of cash to buy a loaf of bread. That is what Americans will soon face unless the Democrats are held in check, and I am not at all optimistic that we can or will do that.
President James Madison warned, "If our nation is ever taken over, it will be taken over from within." The Socialists have taken possession of the land. Goodbye, America.
When President Barack Obama signs this so-called stimulus package into law on Tuesday in Denver, America will become officially a socialist or, more accurately, a fascist nation. Even if businesses remain in private ownership, the federal government will control their operations. In many cases, the government itself will take over majority ownership.
Of course, it is no surprise. Socialists and communists have mentored Obama since his teens. Nor can he bear total blame for this end of American capitalism and financial freedom. We have been on this road for a long time, since President Lyndon Johnson’s War on Poverty and President Franklin Roosevelt’s New Deal. Republicans, too, share blame. Never in my wildest dreams [or nightmares] would I have believed that a Republican President, George W. Bush, would nationalize the banks like he did by signing the first “stimulus” package that was rushed through Congress last Fall.
All sides acknowledge, now, that package did not work. Did Congress learn from that hasty mistake? Obviously, it did not. Most Democrats and a few Republicans stubbornly believe, despite all historical evidence to the contrary, that it is possible to spend our way out of recession. They often cite the example of FDR’s New Deal, forgetting that World War II, not the New Deal, lifted this country out of the Great Depression.
Analysis of this legislation has just begun. The Act, which spends $787 billion, is 1,071 pages long. Legislators had only fifteen hours to digest it before the vote. It is safe to say not one single Congressman or Senator read this bill before voting on it. They would have to have read 71 pages per hour or just over one page per minute, without any breaks during those fifteen hours. Previously, Speaker Nancy Pelosi had promised they would have at least 48 hours between release of the bill’s text and the vote being taken. And, it was only released in printed form. Normally, bills are published digitally, which allows Congressional staffers to do computer keyword searches to evaluate the worthiness of any piece of legislation.
The devil will be in the details. Supporters claim this act will create 3.5 million new jobs. Most economists put the number lower, at 2.5 million. But, let’s give the Democrats the benefit of the doubt and go with the 3.5 million number. That means it will cost $224,857 in government spending for each one of those jobs. Let me say that again so its truth can sink in: every single new job created by this stimulus act will cost taxpayers $224,857!
The press, both left and right, is finding all kinds of funky features buried in this bill. Some are silly, like the millions to save some endangered mouse in Speaker Pelosi’s district. Although maddening, voters should not let themselves be diverted by these trifles. This bill is too dangerous at the macro-level for us to be consumed by such micro-details.
The most alarming fact about this stimulus act is how much it raises the statutory limit on the national debt. It allows the national debt to increase from its current limit of $789 billion to $12.1 trillion. Think about it. We have never had a national debt over $1 trillion, yet the Democrats and three “Republicrats”voted for our nation’s credit line to go to a mind-boggling $12.1 trillion.
So far, the media has barely noticed this all-important detail. Yet, it is perhaps the most dangerous provision. What does it mean to allow such an increase in our national debt limit? It tells us just how much spending the Democrats are planning to do. This $787 billion must be just a down payment.
If the Democrats under Obama pass the kind of spending a $12.1 trillion national debt limit allows, it means hyperinflation. Even the U.S. with its sterling international credit rating cannot borrow that kind of money. There simply is not that much investment money in the entire world to support that kind of spending. And, some international bankers are expected to lower our nation’s bond ratings. That means higher interest rates on what we are able to borrow. If we cannot borrow the money to support our spending at reasonable rates, the government has one other option and that is to print money. It monetarizes the debt, lowering the value of the dollar so that high value dollars borrowed are repaid with lower value dollars.
This is what President Carter did in the early eighties when we had the worst recession since the Great Depression. We had double-digit inflation in a stagnant economy. If we come even close to a $12.1 trillion debt, we will have triple-digit inflation. We will be like the Germans during the Weimar Republic before Hitler. Then, it took a wheelbarrow of cash to buy a loaf of bread. That is what Americans will soon face unless the Democrats are held in check, and I am not at all optimistic that we can or will do that.
President James Madison warned, "If our nation is ever taken over, it will be taken over from within." The Socialists have taken possession of the land. Goodbye, America.
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