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The total debt owed by Americans increased to $51 trillion in the first quarter of 2009. One way to put such a mind-bogglinig number in perspective is to compare it to the value of what Americans produce. Gross domestic product is roughly $14 trillion per year. Thus, Americans now owe $3.62 for every dollar of GDP. As can be seen in the chart below, this is a record.
By comparison, in 1980 Americans owed just $1.55 per dollar of GDP. The ratio began to rise sharply in the 1980s, leveled off in the early 1990s, and surged again in the late ‘90s, continuing to do so through the past decade. Most of the increase since 2000 reflects the rising indebtedness of the private sector – that is, borrowing by nonfinancial businesses, financial intermediaries (banks and such), and households. In contrast, government borrowing didn’t increase much relative to GDP in the past decade -- until last year, that is. Federal borrowing has increased rapidly since the third quarter of 2008, at a rate that is unprecedented in the post-WWII era. (The federal debt figure does not include the many trillions of dollars in entitlement benefits that Congress has promised to future generations. These liabilities pose a very real fiscal burden, but are excluded from official measures of debt.) Finally, a growing share of U.S. debt is owed to foreigners. As noted in the chart, the difference between the debt owed and the debt held by the "domestic sector" is due to (or from) foreigners. Up until the mid-1980s, Americans were net holders of foreign debt. After that, we began to owe more debt than we held. Roughly 10 percent of total U.S. debt is now owed to foreigners.
Source: Federal Reserve Flow of Funds Accounts. Latest data, Q1 2009. Click to Enlarge
This chart is one of many included in the 2009 edition of the AIER Chart Book, available for purchase in our online bookstore.
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I am heading to join the many Americans with out a job.
Further, it means that if we accept the lowest level of bailout figures out there (that I have seen)of $12.8 trillion dollars, this means that the government has paid out to banks, Wall Street, manufacturers, etc. totals of about $40,000 per American just in the past year. One wonders where all of that money went and why it hasn't shown up in freer money being available to help us dig out of this recession. Obviously, this money has gone to buy down the bad debt that others profited from, but it has not helped us deal with the economic consequences of the laws that our Congress passed and then let get out of control through a total lack of oversight.
Now, please lump EVERYTHING that we owe into one big pot and tell us how much it is. Nice charts help a lot.
Include the "unfunded liabilities" of all the promises that the Congressional Clowns have committed.