With all of the talk from Washington this week about debt and balanced budgets, I thought I'd take an updated look at the debt and try to put the size of the problem into a frame of reference that we can relate to.
The latest figures from the TreasuryDirect website show the sovereign debt of the United States standing at $13,840,966,239,053.15. That number is so large that most of us have no way to comprehend the magnitude. Here are some ways to put the number into perspective.
Let's start with the dimensions of our paper currency. A dollar bill measures 2.6 inches by 6.14 inches and is 0.0043 inches thick. It would take 232.56 one dollar bills stacked up to measure one full inch in thickness.
We need to stack up 13,840,966,239,053 one dollar bills. Let's round that up to 13,841,000,000 one dollar bills for simplicity's sake since the debt will soon reach that amount. With 232.56 one dollar bills required to create a stack one inch high, the 13.84 trillion one dollar bills would create a stack 59,516,000,000 inches high. That's 4,959,600,000 feet or 939,330 miles.
Let's put the 939,330 miles into perspective. The circumference of the earth (the distance around the earth's equator) is 24,902.4 miles. The stack of one dollar bills making up the federal debt of the United States would encircle the earth 37.72 times. The average distance to the moon is 238,857 miles (the distance varies because the moon has an elliptical orbit around the earth). The stack of one dollar bills required to pay off the debt of the United States would reach to the moon and back nearly twice (3.93 one way trips).
Let's take a very quick look at the annual interest required to keep investors interested in purchasing more of our debt. For fiscal 2010, the interest paid on the debt was $413,954,825,362.17. That works out to a stack of one dollar bills 1,780,000,000 inches thick which converts to 148,330,000 feet or 28,093 miles. As noted above, one year's worth of interest payments on the federal debt would require a stack of one dollar bills that would get us around the world 1.13 times.
It all makes that stack of bills that you have in your wallet look kind of small, doesn't it?
By the way, the People's Bank of China announced that China's foreign reserves reached $2.6483 trillion at the end of September 2010. China would need to accumulate 5.2 times that amount of money to pay off the United States federal government debt.
Sorry for depressing you with reality.
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Any idea how USA going to settle that debt or it won't ?
ReplyDeleteIt certainly reinforces my theory that "the West" will eventually decide it is too big to fail, and everyone will just reset their debts to zero.
ReplyDeleteI say we offer up Alaska as payment for some of our debt.
ReplyDeleteOne has to wonder if there isn't going to be some debt forgiveness - i.e. take pennies on the dollar or get nothing. This is just a slight alteration of the "reset to zero" theory.
ReplyDeleteA Political Junkie, once our debt is forgiven our currency will be of no value for many years to come, just like if you were to default on an auto loan. You would pay for many years to come in higher interest rates. Please get serious with your comments. What we do now will directly effect the quality of life for many generations to come......
ReplyDeleteI'm not really certain what the value of our fiat currency is now.
ReplyDeleteStrange, we can give Alaska away but we can't drill for oil. Do you think the new owners won't drill. Wake up!!!
ReplyDeleteDon't give Alaska away. They have a budget surplus and billions worth of resources. Now California, that's worth considering.
ReplyDeleteI understand your goal, but "length of a stack of one-dollar bills" is not a very good metric to use for putting things into perspective. I don't measure value or worth by how tall of a stack of money I'd need to buy something. Nor is the physical distance to the moon something that's easy to visualize in tangible terms, either.
ReplyDeleteWhy not just express the national debt in terms of what could be purchased with that amount of money? For instance, it's enough to purchase two cars for every person in the United States that's old enough to drive. It's enough to build a mere 10,000 B2 bombers, or to wage only about 10 wars in the Middle East. It's enough money for NASA to send a team of astronauts to the moon and back every single day for the next 30 years.
$13.84 trillion is many things. But a tall stack of dollar bills is not one of them.
In its realistic situation, the US will technically have to file bankruptcy in order to get out of its debt. It is now impossible to ever pay any of this debt off. I just recommend getting prepared for the hyperinflation in 2011. Recommendations across all inflation monitoring blogs is to buy your clothes, food, etc. now in order to at least be able to live modestly for a while.
ReplyDeleteThe most likely outcomes of this situation are a devaluation of the dollar to make the debt more palatable and hyperinflation. Both are occurring before our eyes.
ReplyDeleteNonsense...
ReplyDeleteNo sovereign free floating exchange rate currency issuer can ever run out of money.
http://moslerforsenate.com/wp-content/uploads/2010/06/7DIF.pdf
"Don't give Alaska away. They have a budget surplus and billions worth of resources. Now California, that's worth considering."
ReplyDeleteLOL, California is a net contributor to the federal govt. We pay waaaaay more in taxes than we receive in services. Good plan.
To think that not so long ago we forgave debt to a load of African countries that were in trouble paying off their debts to us - glory to McBroon and co and how odiously self-congratulatory we were.
ReplyDeleteEmilie's grandad London
US debt is 13.84 trillion. Intrest paid in 2010 was $413. Most of the money I guess go to the Federal Reserve (FR), that is a private bank. That means that FR owns US? Do they own the world?
ReplyDeleteIf they get 400 billion a year, what do they do with the money? Who are these peopple that owns FR, US and the world? Where do they live?
Green basin has $80 Trillion in shcle oil, but the media doen't tell you.
ReplyDeleteUSA gov ownes most of the property, but wont release.
Soooooooooo, forget about any debt, for now.
@skate - forget about debt for now? the debasing currency is taking place now, US is printing money...hyperinflation and the middle class folk gets to brunt the debt load and get squeezed, it is not sustainable to continue endless growth trend and not hit a wall... global population climbing and energy and economic viability depleting, and the 'well to do' tycoons deals the uranium, shale oil and the rest is divide and conquer
ReplyDeleteDebt reduction is a war on the middle and lower classes. They are talking about reductions to Social Security, Medicare, cutting personnel expenses like health insurance and pensions, and reducing aid for education. Our leaders need to review the functions of government and cut out the frivolously unnecessary and inappropriate like funding for the Dem and Rep national conventions, Woodstock museums, ethanol subsidies, and subsidies to industries that ship jobs overseas. You promised President Obama!
ReplyDeletePresident Obama and any other president has no power to meaningfully change our lives, but they want us to think that. We give them power, it is time we take it back.
ReplyDeleteWhat China is shooting for is Taiwan. How much do you think the US will "sell" it to China for? I say about $3 Trillion. It will seem cheap after things go bad on the Korea Peninsula, China pulls NKs leash, the US is thankful, South Korea gets NK back (wrecks the SK economy)and the average US citizen continues to get more HD channels and saves more polar bears.