Every Man, Woman and Child In Country Owes Nearly $60,000
Another "landmark" was achieved earlier this week after the United States debt clock officially moved past the $18 trillion (that's trillion with a T) for the very first time.
As of this moment, the country owes $18,005,549,328,561.45. That means that every man, woman and child in the nation owes $59,263 as their share of the debt.
Of the $18 trillion in debt, $12.9 trillion is in the form of "public debt", while the remainder ($5.08 trillion) is in the form of "intragovernmental holdings". "Public debt" is money that is owed to mutual funds, pension funds, foreign governments, individual investors and so on. "Intragovernmental holdings" is money that is owed to Social Security, the Department of Defense Military Retirement Fund, etc. The US government, for instance, owes the Federal Old-Age and Survivors Insurance Trust Fund well over $2 trillion. Remember - federal law REQUIRES that any excess funds in Social Security, etc. be invested in "interest-bearing securities backed by the full faith and credit of the United States."
Of the $12.9 trillion in public debt that the United States owes, roughly $5.1 trillion (as of May 2014) is owed to foreign governments. China ($1.2663 trillion) and Japan ($1.2211 trillion) own a large percentage, while countries such as Belgium, Brazil and Switzerland also have sizeable positions in US debt. In short, the US government has relied heavily on foreign buying to continue funding their deficit spending.
Let's look at how US debt has grown over the past number of decades:
The United States has managed to shrink its deficit recently - however, deficit spending is expected to accelerate once again in the coming years. One of the main reasons? Higher interest rates. Interest rates will not remain this low forever, and when they do rise, the United States will have to pay a significantly higher amount of money every year to service their debt.
In short - it's just a matter of time before the United States debt clock crosses the $20 trillion mark.
Source: United States Debt Clock
Filed under: General Knowledge