As a review of the posts on this blog reveals, I fret a lot about debt in this country. That’s because I believe debt is destructive of our economy, our characters, our well-being, and ultimately our liberties.
Maybe the upshot of this recession will be that as a nation we’ll start weaning ourselves of debt, and learning to live within our means. We are now learning a painful lesson about the consequences of trying to live beyond them.
Some troubling facts:
* The average American family has over $8,000 in credit card debt.
* Only 2% of Americans live in homes that are not mortgaged.
* Less than half of Americans have more than $10,000 in savings.
* In FY 2008 the federal government (that means us) paid approximately $412 billion in interest on the national debt.
* The federal deficit in 2009 will likely exceed $1 trillion. That number is so large it’s difficult to comprehend. Consider that 1 million seconds ago was 12 days ago. One billion seconds ago was May, 1975. One trillion seconds ago was 29,700 B.C.
* From 1957-2007 the national GDP grew at an average rate of 3.3%/year. Over that same 50 year period public and private debt grew at an average rate of 15.3%/year.
Total U.S. debt is now 360% of GDP and growing. The previous peak was 300%, during the Great Depression.
* Household debt alone exceeds 100% of our national GDP.
This is all, of course, unsustainable. Continuing down this path can lead us only to bankruptcy and an economic meltdown that will make our current toubles seem trivial.
At the risk of being too preachy, and as I’ve said many times on here, we citizens simply must learn to be financially disciplined. And we must not succumb to the pressure to borrow and spend.