US DEBT COMPOSITION
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US DEBT COMPOSITION April 21, 2007 09:25AM |
http://www.financialsense.com/editorials/hodges/2007/0402.html
THE BOTTOM LINE
A Debt Summary, 2007 Update
by Michael W. Hodges, Author
Grandfather Economic Report
April 2,2007
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Everyone is talking about debt these days. Perhaps more than ever before — with good cause. Huge debt levels with soaring trends can cause one to think America is becoming more addicted to debt than ever before. Like a drug junkie needing more each day, there are more and more debt junkies — in all sectors. America used to be an economy based on production and savings, with a strong manufacturing base. Later it was said America had become what they called a 'service economy', as manufacturing and saving ratios declined and trade deficits soared. Perhaps some will say America now has become a 'debt society'. Who knows where that leads. TWO GREAT QUESTIONS: QUESTION > what does a summary of all debt in America look like? Answer > see below. Knowledge is Power... provided it's based on hard data. Three (3) chapters of the Grandfather Economic Report series cover Government Debt and Private Sector Debt and International Debt in America - - telling the debt story by use of color data graphics: Readers requested an additional web page summarizing debt in America in table form. Here it is. BOTTOM-LINE - - DEBT SUMMARY TABLE
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TOTAL DEBT IN AMERICA |
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DEBT TYPE |
DEBT AMOUNT |
Debt Per Child |
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GOVERNMENT SECTOR DEBT: |
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Federal Government Sector debt - a record high as of year-end 2006 (Treasury data and Federal Government Debt Report, includes $2.2 trillion federal govt. owes foreigners, plus $2.7 trillion debt owed U.S. domestic public, plus $3.8 trillion surplus siphoned from and owed to trust funds) |
$8.7 Trillion |
$29,097 |
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State & Local Government Sector debt - a record high |
$2.0 Trillion | $6,689 |
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Un-funded Social Security contingent liabilities estimated looking forward * |
$7 Trillion | $23,648 |
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Un-funded Medicare contingent liabilities, estimated * |
$37 Trillion | $123,745 |
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Un-funded federal employee pension liabilities (incl. Postal service) |
?$4 Trillion |
? |
| Un-funded federal employee medical contingent liabilities | $ | $ |
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Un-funded state & local government employee pension & medical contingent liabilities |
?$1 Trillion |
? |
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Other off-budget Federal Govt. borrowings* |
? |
? |
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SUM above Government Debt |
$59.7 Trillion + ? |
$199,666 + ? |
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PRIVATE SECTOR DEBT: |
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Household Sector debt - soaring record high |
$12.8 Trillion | $42,809 |
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Business Sector debt - record high |
$9.0 Trillion | $30,003 |
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Financial Sector debt (domestic) - explosive record high |
$14.2 Trillion | $47,492 |
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Other (extra foreign debt in addition to such included in numbers above sectors) |
$1.7 Trillion | $5,686 |
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Un-funded business sector employee pension & medical contingent liabilities |
?$0.5 Trillion |
? |
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Impact trillions of dollars of derivatives on business & financial sector debt |
? |
? |
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SUM above Private Debt |
$38.2 Trillion +? |
$127,759 + ? |
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SUM ALL DEBT |
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SUM Government + Private Sector Debt
(including Contingent liability items*)
Note: Although above data is exactly as published from the sources, the author believes true debt is even higher. A few examples > corporate debt is under-stated as evidenced by many companies with off-balance sheet debt (Enron, etc.) and household debt above certainly does not include many areas of non-recorded debt. I think many will agree that individuals and corporations never over-state debt— instead, many purposely under-state same.
Note: If you believe in the reliability of data reported by the federal government and the Federal Reserve Board, then you must accept the above data, because those are the data sources. If you have data and sources for the unknown (?) areas in the above table, please email M. Hodges.
DEBT GROWTH CHART:
The above debt summary table is as of year-end 2006. Excluding unfunded mandates, this chart shows
— total debt (private and government) is $48.4 Trillion ($10.7 trillion governments, $37.7 private sectors) — equivalent to $161,287 per person (including those in diapers), which is equivalent to $645,148 per family of 4 and $45,514 more per family than last year.
This chart from the chapter 'America's Total Debt Report' shows the trend of that $48 trillion debt (red line) soaring up and up much faster than the economy (blue line).
If we include several unfunded liabilities, then total debt (private plus government) is $98 Trillion — equivalent to $327,425 per person, which is equivalent to $1.3 million per family of 4.
Total debt of $48 trillion is 460% of net national income —-a record high ratio— indicating an economy more debt-dependent than ever. Each year more debt is needed to produce a dollar of national income than the prior year, a type of 'negative productivity.'
Zooming debt - - declining real savings - - soaring trade deficits > > very troubling trends !!
~ CONSIDER THESE FAMOUS QUOTES ~
"No generation has a right to contract debts greater than can be paid off during
the course of its own existence." - George Washington to James Madison 1789
"We hear sad complaints sometimes of merciless creditors;
whilst the acts of merciless debtors are passed over in silence."
"I place economy among the first and most important virtues,
and debt as the greatest of dangers to be feared." -
"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the
currency system involved." - Ludwig von Mises
"The decline of great powers is caused by simple economic over extension."
If you want to see data up-dates to this DEBT SUMMARY TABLE page,
click and book-mark this page at http://mwhodges.home.att.net/debt-summary-table.htm
© 2007 Michael W. Hodges
Editorial Archive
Web note: The above editorial is a recent summary of an updated chapter from Michael Hodges series, Grandfather Economic Report. Be sure to read 3 debt chapters each with color data trend graphics to help tell the story of debt in America — since a picture is worth a thousand words:
1. America's Total Debt Report (includes private sector debt)
2. Federal Government Debt Report
3. Trust Fund Debt Report (government siphons social security trust fund)
4. International Trade & Debt Report
Michael W. Hodges
SUM All Government and Private Sector Debt
(excluding contingent liability items*)
per person
We don't 'owe it to ourselves'
We owe $10.3 Trillion (21.3% of above debt to international entities
($2.2 Trillion owed by federal government +
$8/1 Trillion by private sector)
? = No estimate available or there may be other contingencies
* = for discussion some of above government items see the Grandfather Social Security Report, the America's Total Debt Report and Trust Fund Report articles, the State & Local Government Spending Report and the International Trade & Debt Report. (Debt Data Sources: Federal Govt. Treasury Dept.; Private Sector and State & Local Govt. from Federal Reserve flow of funds accounts, table D.3)