Tuesday, April 24, 2012

I'm a little depressed about my debt right now.

     Debt is not inherently bad, and in fact some would argue that it is a necessary evil, but most people will also admit that your debt has to have a realistic ratio to your income.  Lately I've been more worried about mine, but even more so about the debts that my kids have and where it will fall against their incomes. 

     You've probably guessed already that I'm not talking about personal debt, but about our portion of the National Debt.  I think we've done a good job of showing our kids how to live within their means, how to be frugal and to look for deals, to save money for a rainy day and to put off purchases until you can truly afford them.  If you know either of our 2 adult children, you've more than likely seen evidence of this.  I'm proud that we did this, but we have also taught
them to be patriotic and how great of a country the U.S. is, and in some respects, we may have done them a disservice on the latter point.  You see, if they choose to stay in this country, they will inherit a soul crushing National Debt and it's getting worse all the time.  See the chart on the right that illustrates what the National Debt is as a percentage of our GDP.  Would you have thought this was twice as bad now than during the Great Depression?  It's a sobering thought.  This morning, according to US Debt Clock
my portion of our National Debt is $50,015.  I say sobering thought because I must have been really drunk because I don't even remember borrowing that money, and yet I owe it.  It actually gets about 3 times worse than that, if I consider that that figure is my debt as a citizen, but not my debt as a taxpayer in the U.S.

     If I look at my debt as an income taxpayer, I owe $138, 187.   What ?  How in God's name did my debt go up almost three times in the space of one paragraph?  Because the U.S. income taxpayer is a dying breed
that I, unfortunately, am a part of.  Currently non-taxpayers outnumber us at a ratio of almost 2 to 1. There are approximately 313,000,000 people living in the US currently, and of those approximately 113,000,000 pay Federal Income tax.  I can see how little babies can't really contribute, I'd give them a year or two, but what about the rest of those guys, how come they are not paying something at least?  I'm sorry to say it, but it's the tax breaks that we hear so much about.  Both President Bush and President Obama have enacted legislation that have taken more and more people off the Federal income tax rolls.  Just a scant decade or so ago, only 27% of households were exempt from Federal Income taxes, and now it's 47%. mainly due to tax breaks.  Scared yet?  It gets even worse for my poor kids.

     You see they live in the US, but they also live in NY state and are subject to NY State tax laws too.  If we look at the State debt, their portion adds another $15,000 a piece to their debt, and that is as a citizen, not as
a taxpayer.  Figures weren't readily available for how many New Yorkers were State taxpayers, but I'm scared to know considering we have over 3 million food stamp recipients out of a total population of 19 million people.  My best guess puts my children's debt load now at $180,000 each right now.  Take a breath, it's not all bad, they will probably get great jobs since they both plan on finishing college, but wait, that actually is a whole new problem in itself. The student loan debt in the US has risen over 500% in the last decade.  See the chart on the left for an illustration.  What is really scary is that the blue line below it is for all other debt during that time, and it's not like a lot of folks were socking away money while the housing bubble burst.  My family has done a good job of keeping our college loan debt down, but I hear scary figures from folks all the time that make me shudder and no one seems to be keeping their eye on the ball. 

     This blog could go on all day talking about the money that my kids do get to keep and how much less it buys.  Need a quick lesson?  Go to a grocery store where some of the staples have doubled in price in the
last 10 years and will do so again in under 5.  $3 loaves of bread, $5 ground beef, $4 gallons of milk, all coming and coming quickly.  It will cost you more if you have to actually drive there.  With gas pricing at $4 a gallon and rising, the impact of the this on my kid's expendable income will be staggering.  I'm betting that they will stay home a lot.  A lot of factors go into these increases, but our support of ethanol rates right up there.  It's pricy, it's bad, it hurts our engines, and is not better for the environment, just more expensive.  Oh, and it makes all of our food cost more, but sure let's make more of that too.   I've only talked taxes in this blog, but I could write a whole other blog on the fees we pay now and their record increases.  The costs of obtaining and keeping a license have increased exorbitantly and that's just the first example.  I'd tell my kids to hunt for their food, but that's far from free now too and increasing more each year.  Drink to relax, and you'll pay more taxes, Smoke to relax and you'll pay even more.  I really need to stop before I stress myself out.  I'd highly recommend that each of you take a look at the debt clock that I attached earlier, but be quick, my debt went up $10 since I started to write this blog.  I'm sorry kids. 


cdyarger said...

Ugh!!! This is the most depressing blog you have written. Very eye opening for some, I am sure! I still have faith that our next President/Congress will be able to enact some changes that will help. I have to - or I would need to move out of the good ol' USA!!!

Rob Carey said...

Not to make you even more depressed but you need to scroll down to the last line on the debt clock to show see what your total debt is including the unfunded liabilities of Social Security & Medicaid/Medicare Parts A - D. Over 1 million per taxpayer. Only one word for this and we hear it a lot - unsustainable. A year, maybe two is all we have to turn this around in the right direction or all you have to do to see our fate is look across the Atlantic. Of course, if interest rates rise to a more historically normal level it will be game over much sooner. I better get back to work pulling the cart now but boy, is it getting heavy.

AA said...

Hey Bill, I agree with Char... most depressing blog yet. I know this is info I should be aware of but I read this blog to be entertained and to "keep up" with the goings on. I look forward to nest weeks' blog and maybe a chuckle or two. AA

Brother Mike said...


Good information and thanks for posting. Others are right about it being depressing but as we clearly see a much greater Depression is coming if we don`t get our act together.

On the bright side Congress and Presidents of the future only have 1/3rd of Americans left to absolve from taxes. Our day must be coming soon!

Anonymous said...

If you take 8 zero's off and treated it like a family budget, the $1.5 trillion might be more understandable example:
Annual family income $21,700
Money the "family" spent $38,200
New debt on the credit card $16,500
Outstanding balance on the cc $142,710
Total budget cuts $385
or break the trillions in comparison to seconds and "One million seconds comes out to be about 11½ days. A billion seconds is 32 years. And a trillion seconds is 32,000 years."

Bill said...

Great comments all, and Anonymous, I love your breakdown. I'll try to be funny next week.