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Refinancing the country

Tuesday, March 07, 2006
According to this article from the Associated Press, Treasury Secretary John Snow has told Congress that we've more or less reached the debt limit for the government ($8.2 trillion dollars) and he's encouraging them to raise the limit "to avoid the nation's first-ever default on its obligations."

Now fortunately, according to the CIA's World Factbook, our gross domestic product is somewhere in the range of $12.something trillion. This is great! I mean, all the money we spend as a country in a year and we make from exports and such is 150% of the debt of our country!

Wait a minute! Since this is money the government has borrowed on our behalf, let's examine how much it is in terms of the federal budget. According to this governement page which has pdf files showing the 2006 federal budget, the total income (receipts) that the government expects to get is somewhere around $2.8 trillion dollars. While that's a lot of money, that's only about a third of the debt. In essence the government is carrying a debt equal to three year's salary!

From an individual perspective, given the ~270 million people in the United States, the government owes on our behalf ~30,000 per man, woman, and child. This is just under a year's salary for the average citizen. Of course, we tragically can't put all the little children and elderly folks to work in our factories, so the actual amount owed per taxpayer is significantly higher.

Do you feel like buying the federal government a new Jaguar X-type? I sure don't. I have a lot of my expenses of my own. Running a deficit is all right to a degree, but I personally feel that the amount we owe is getting out of hand. Perhaps we need to find some spending restraint in our future politicians... just think what we could do if we weren't funding wars and rebuilding other countries!

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