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Nation’s Debt Passes Grim Milestone

The nation’s debt has reached a symbolic milestone. With gross domestic product of roughly $15 trillion, and total debt of $15.23 trillion, $15,000,000,000,000 that’s how many zeros in 15 trillion. Our total debt is now bigger than our economy, as USA Today noted. What’s more, the Obama administration’s projections put our debt at more than $23 trillion by 2020, well in excess of the projected $22.5 trillion GDP.

scale-1aFor those of you that don’t know, the GDP or Gross Domestic Product, represents the total dollar value of all goods and services produced over a specific time period.  It is one of the primary indicators used to gauge the health of a country’s economy.  How the bean counters calculate the GDP is confusing at best but a simple way of looking at it is by adding up what everyone has produced in a year.

The GDP is the total market value of all of the goods and services produced within the borders of a (our) country. . It includes all of private and public consumption, government outlays, investments and exports less imports.

So if the GDP goes up that’s usually a good thing.  What is bad is when our debt is more than what we make.  Some economists dismiss this as terrible news comparing it to the average American household.  They contend that the average income in America is say $50k a year but the typical house costs $225k.  That is a debt that outweighs the yearly income.  Well that’s all fine and well but the typical American household has to play by rules that the government doesn’t.  Like living on a budget and having to control and service debt.

If you can’t make your payments you can’t just increase your debt ceiling and everything will be fine.  …or just print more money.  The government should not be able to either, but they do.

If the economy was growing faster than the rate at which the government is borrowing money, the debt would not be much of a concern. Unfortunately, this is not the case.

Here’s something for you to chew on…  “The U.S. has over 315,000,000 people and over 112,000,000 taxpayers. This means the total debt per taxpayer is over $145,000 and total liability per taxpayer is over $1 million.” USDebtClock

The time to get your personal finances in order is here.  There are hard times ahead of us no matter what the talking heads on TV say.  We are in a holding pattern waiting for the economic crisis that is inevitable to happen.  To see our future all you have to do is look at Europe and the other countries that have a ton of social / entitlement programs that have led to unsustainable debt.  …we are next.

The best thing you can do if you are struggling with your debt is to contact a professional that deals with debt management and get things under control.

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Please call (800) 920-2262 if you have any questions. DebtHelper.com’s consultations are free, call them any time.

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