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False starts didn’t only mark the start of college football season.
They and a whole lot of expenditures — and wars on terrorism — over the least two decades have tore up the United States economy. The country’s debt has spiraled to scary levels.
When Bill Clinton left office as the president in 2000, he had spearheaded a dramatic upturn in fortunes, with the country recording an impressive $280 billion surplus. At the time he left, the Congressional Budget Office estimated that at the end of 2011, the country would have accumulated $6 trillion in surpluses.
Of course, the CBO couldn’t have imagined that by 2011, that surplus would actually become $6 trillion in deficits, according to the Committee for a Responsible Federal Budget. George W. Bush and Barack Obama, despite their best efforts, didn’t manage to spearhead any kind of turnaround.
What is the U.S. federal debt?
As of 2 p.m. U.S. Pacific Standard Time, the U.S. has a national debt of $21.5 trillion. This figure comes by adding up the debt held by the public to that held by the government.
Public debt is the amount of money held by individuals and corporations. It also includes amounts held by the Federal Reserve System.
When it comes to the various countries to whom this debt is owed, Japan, China, Ireland and the Cayman Islands lead the pack, according to Business Insider.
Generally, foreigners hold close to half of the nation’s federal debt, according to The Bureau of the Fiscal Service. Is this is why politicians tout this debt as a potential security threat? The logic would be that owing foreigners too much compromises the sovereignty of the United States.
A country like China or Japan could simply sanction a dumping of U.S. bonds, and that could potentially send our economy crashing. This theory has not been tested as yet, but it doesn’t negate that these are some significant numbers and that the country should be pretty worried.
The good news: creditors don’t really worry about sovereign debts as long as they don’t go beyond 77 percent of GDP, according to The Balance. That and the fact that we will probably never be able to pay off our debt, as it would take nearly 400 million years to pay it back, Sovereign Man claimed.
What is the U.S. state debt?
State debt is the outstanding amount of money owed at the state level. An estimation of that is that we are getting closer to $1.2 trillion, according to USGovernmentDebt.us.
While these are significant sums, they are a far cry from the gross national debt. California, New York, Massachusetts and Illinois lead the pack when it comes to debts owed, according to Ballotpedia.
State and local debts are never really a major concern for the federal government, as they are managed at the state level. States can look for funding and finding ways of increasing or decreasing taxes without bureaucracy expected at the national level.
U.S. personal debt
Personal debt includes car, student and credit card loans.
At the end of last year, the total household debt in the US hit an incredible $13 trillion. There seems to be a trend in which debts increase as people get ever-closer to their peak earning years. That’s because Americans even as young as under 35 years old are now carrying $67,400 in debt, according to TIME.
Generally, people between the ages of 45 and 54 have the most debts, averaging $134,600. Those between the ages of 35 and 44 have accumulated a debt of $133,100 on average, according to TIME.
This is not a surprise, said John Salter, a professor at Texas Tech University.
“The trend tends to follow when people have children and those kids’ needs,” Salter told TIME. “We see that rise in debt at the time most people are looking for bigger homes to get more space for their family, buying cars for their children, or paying college tuition for them.”
The figures are mind-blowing. However, debt is pretty easy to manage at any level and nobody is holding a gun to our temples to not do it, especially at the national and state levels.
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Photo credit: Ruth Enyedi via Unsplash