The Multi-Trillion Dollar Debt and What It Mean to Your Standard of Living Right Now

Wednesday, August 25, 2010
By Paul Martin

Current U.S. debt stands at $13,363,228, 000, 000. This number is often broken down on a per capita basis, currently $44,000.

I have always thought of the per capita number as somewhat misleading. I’m guessing that most people who don’t have $44,000 in the bank, shrug and think, “Good luck with collecting that from me.”

But the way the $13,363,228, 000, 000 should be looked at is debt that results in that much money not being available for private sector business to borrow. It boggles the mind to think what research could be conducted and products produced and created if that money was available for the business sector. In this fashion, the huge debt is impacting the person, right now, who doesn’t have $44,000 in the bank, by the products that haven’t been created because of the debt. One has to wonder how higher a standard of living a person would face, who doesn’t have $44,000 in the bank, but who would live in a world where government borrowed so aggressively.

Further, every uptick in debt brings the U.S. closer to the point in time when new government debt won’t be absorbed at current interest rate levels. At such time it is highly likely that the Federal Reserve will step in to buy Treasury securities, a very inflationary move. Thus, those without $44, 000 in the bank (along with most everyone else) will face prices rising much faster than their incomes.

Bottom line: The “good luck with collecting $44,000 from me” mentality misses the big point in that it is being collected from everyone right now, because it is resulting in a much lower standard of living.

The Rest…HERE

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