As Congress debates deficit reduction, we should consider how much more the nation is borrowing now than it has in the past
The U.S. government owes its creditors an awful lot of money. As of May 31, 2011, $14,344,668,281,211.01 in public debt was outstanding, according to the Treasury's "to the penny" calculation. But the U.S. government is just an extension of the American people. So really, that more than $14 trillion dollars is owed by all taxpayers. How does the amount owed break down per person?
This question is answered with some simple division. According to Federal Reserve estimates, the U.S. population at the end of May was 312.25 million. That's everyone -- not just adults and civilians. If you divide the total debt owed by the total number of Americans, you find that each one owes $45,939.
That's a lot of money. But it's even more if you remember that it's the amount owed by each person, not by each family. For example, a family of four would consequently owe $183,756. This amount is more than the median home price in May of $166,500. So there's a good chance that family of four owes more money to the nation's creditors than it does on its mortgage, if it has one.
But how severe is the current debt burden per person on a historical basis? And how does inflation come into play? The chart below answers both of those questions. It shows debt per capita since 1918, adjusted for inflation:
The data behind this chart isn't perfect, as the Treasury only has annual debt estimates before a certain point. But it gives you a pretty good idea of the general level of per person debt over the past century. Debt per person was just $894 in January 1918. And remember, this is adjusted for inflation. So that's equivalent to us owing that amount now -- instead of $45,939. The amount of debt each American owes is more than 51 times more now than it was than.
This is pretty staggering and it shows just how deep a hole the U.S. has to dig itself out of.
Update: Several readers asked for it, so here it is: This post considers how income has also grown. It shows the ratio of personal income to U.S. debt over the years.
Image Credit: REUTERS/Chip East