The amount of U.S. debt per person has ballooned by more than a factor 50 in the past 90 years. This tremendous increase of inflation-adjusted federal government borrowing was explained in a post on Monday. But as some readers noted, real income has increased as well over the years. If you take rising incomes into account, does the picture look any better?
Considering income does make the U.S. debt level look a little less catastrophic, but still pretty ugly in a historical context. Here's a chart showing the inflation-adjusted debt per person line from Monday (in red) along with the ratio of Americans' personal income and U.S. debt (green):
I should note a few things about this new curve. First, you don't need to adjust for inflation or population, because both of those units will drop out when taking the ratio. This chart also only shows the ratio since 1929, since that's when the Bureau of Economic Analysis begins its personal income data (it also starts annually, moves briefly to quarterly, and then to monthly in 1959).
For starters, what does this ratio mean? It represents the number of times Americans' annual personal income could pay off the national debt. For example, if the ratio is three, that means that Americans earned enough income during the year to have paid off the national debt three times. Put another way, the national debt amounted to one-third of total personal annual income.