Each American Household Owes Average of $546,668
USA Today recently published an article that has many people talking today.
In the article, the USA Today laid out just how much money the US government owes in debt and unfunded federal commitments. It also breaks down how much each and every American household owes for their portion of the debt.
The results are quite astonishing and are leading many people to ask the question: how will we ever pay for all of this?
Many people think that the $11 trillion dollars plus in currently outstanding public debt is the sum total of the money that the US federal government owes. This is not the case.
The $63.8 trillion dollar figure includes all of the government's liabilities - everything from Medicare to Social Security to military pensions to public debt.
According to the USA Today, the $63.8 trillion dollar figure measures "what's needed today - set aside in a lump sum, earning interest - to pay benefits that won't be covered by future taxes".
The $63.8 trillion dollar number translates into $546,668 for every household in the United States. This represents each household's share of all of the federal government's unfunded debt obligations, commitments and promises.
This is on top of the $122k in personal debt (mortgages, credit cards, etc.) that every household in the United States is currently carrying, on average.
The article points out that the strain on both Social Security and Medicare will only increase as the Baby Boomer generation moves into retirement age. It also notes that Congress has not set aside money to "pay military and civil servant pensions or health care for retirees".
These numbers are even more alarming when you consider the fact that the government is predicting massive deficits as far as the eye can see. This will only dramatically increase the debt burden of the United States over the next 10-20 years.
Throw in a proposed trillion dollar plus health care reform package and continuing wars in Iraq and Afghanistan, and you have a prescription for disaster.
Will the United States have to dramatically cut spending to pay for their spiraling debts?
Or will taxpayers end up bearing the majority of the burden?
Can the United States avoid a complete financial meltdown over the next 10-50 years?
Source: USA Today - Leap in U.S. debt hits taxpayers with 12% more red ink
Filed under: The Economic Meltdown