Back in May 2008, federal, state, and local government obligations were estimated at $531,500 per American household (source: USA Today). This was a total of $61.7 trillion. I’m wondering how the same numbers would look right now. With more people jobless or involuntarily retired early it would seem that the obligations would have grown. We also have perhaps $3 trillion for bailing out banks and stimulus spending. If we were nervous about paying for these debts and entitlement programs a year ago, shouldn’t we be terrified now? Presumably the obligations can only be paid for by private sector workers, whose ranks have been shrinking. (You could argue that government workers pay various taxes, but their original salary all came from tax dollars to begin with.)
8 thoughts on “Government debt and other obligations per household”
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Taxes are going to be 90-100%. Calif* is raising taxes in a time of 9% unemployment to fund mortgage programs. Think of the increases in a time of 5% unemployment.
Yep! If you want to discourage spending, I can’t think of a better way to do it than borrowing a boatload of money and making people uncertain about the future of basic government programs.
The only positive thing the “stimulus package” seems to be doing is making me want to borrow as much money as I can, as long as its at fixed rates, ’cause I think there’s a monster inflation storm coming, and I’d rather stick the banks with the bad dollars than hold ’em myself.
I’ve read the number is over $90T now. There’s no way to pay it without monetizing the debt, so hold on to your golden hat!
@heroine: you can’t have 90% taxes _and_ unemployment benefits. Once the numbers get close people will just stop working.
See also: bankrupt.
Taxes will never be 90-100%. Go look up the Laffer Curve. Nobody, rational or irrational, would work if their total income went to pay taxes.
Everytime it becomes clear that taxes can only go one way (up), some politician thinking about re-election cuts them again. No politician in their right mind will advocate significant tax increases in order to pay our public debt. Our country will default first.
bullion under my pillow is comforting
The top tax rates were over 90% from the 1950’s to the 1970’s. The people in those brackets still worked. Hearts & minds are remarkably flexible & controllable, especially in an age where messages can be repeated infinitely for free.
How much of that 61T can we save, if we stop invasive medical care on the elderly, and have them live with their children. That’s what going to happen… among other things. And people think Madoff was a large pyramid scheme.
The NYT indicates that we’re already on the hook for $8.8 trillion – and that was before Obama’s latest $787 billion porkulus bill and $275 billion mortgage bailout plan — so tack on another triillion…
http://www.nytimes.com/interactive/2009/02/04/business/20090205-bailout-totals-graphic.html
Add in the fact that the tax credits in the stimulus plan will likely create the tipping point in which more people will be getting money back or paying no taxes than are actually paying into the system – believe it’s about 52% moochers now. Yes, we should be terrified – it could mean democracy itself is broken.
(love the blog and your website, Phil — great information)