Debt, then and now

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A. M.'s picture
A. M.
Status: Diamond Member (Offline)
Joined: Oct 22 2008
Posts: 2367
Debt, then and now

I came to Chrismartenson.com in 2008, 5 years ago to the week. 
One chapter that stuck with me was Chris's presentation on "How much is a trillion?", followed closely by "Debt".

At that time, Chris explained the liabilities in a way that really made sense to me - paraphrasing:
Everything from the first pilgrims until 1973 - cost the U.S. 1 trillion dollars.
He went on to say that in 4 and a half months, we had created another trillion dollars in debt. 

Obviously, 2008 was a crisis! Now, with the great recession over, we can look back at those startling numbers and say "All's clear now". 
Certainly, that's the choice of most folks, and at the command of the Federal Reserve and Treasury, there have been jitters, but no real fears.

So, where are we today, and how does that debt stack up?

Well, let's look at what Chris said in 2008...
"The pure debt obligations of the US Government as of April 2008 stand at 9 trillion, 444 billion dollars and change. This is only the debt."

"The total debt in the United States now stands at over 48 trillion dollars..."

"If we adjust these debt levels for both population and inflation over time so we’re comparing apples to apples, we find that in 1952 there was the equivalent of $76,000 of total debt per person and that today the number is $183,000. At $183,000 per head, this means that today the average family of four in America is associated with $732,000 of debt."

Fast forward to 2013
Well, as of now, we're at just under 17 trillion dollars as a figure for our pure debt obligations... at the time of writing, 16,964,509,XXX. That's the obligations of the U.S. Government. That's a staggering 7 trillion dollars in 5 years. 

Our total debt, is up to 60,052,239,XXX - which means we have increased our total debt by 12 trillion dollars in 5 years.

Our total debt per person is at $189,500 (which is 6,500 more than 5 years ago, which basically amounts to us losing ~$1200/year) and the average family's debt obligation is $752,000, which sounds to me like growth (in debt) is certainly not equaling prosperity, because the average family is attached to $20,000 of further debt obligation than they were in 2008... with interest.

If this were linear, and we were to say that these rates would continue to grow arithmetically, it would be alarming.
Given exponentiation and constant rate of growth, this should have everyone here squirming in their seat. 

There's plenty of doom-saying, fatalists out there crying about the end of the U.S. 
At what point do they become realists?

Cheers,

Aaron

Source: http://www.usdebtclock.org/

jtwalsh's picture
jtwalsh
Status: Gold Member (Offline)
Joined: Oct 1 2008
Posts: 263
Inmates Running the Asylum

            It amazes me how the main stream media can end run the issue of the un-sustainability of our increasing debt load.  In all the hoopla about cut salaries, closed monuments, the pain of merchants whose businesses rely on government employees and/or visitors to government sites and the fiasco of the weekend’s EBT card failure, almost no one was reporting or commenting on the true issue.  How much longer can we maintain this increasing debt burden?

            As an analogy we could view the Tea Party folks as desperate parents whose child in collage has run riot with the family credit card.  They are not even suggesting that we take the card away, only that we put a limit on how far the kid can drag the family into debt.  For holding to this rather rational position they have been ridiculed as troublemakers, non-team players, undemocratic and unsophisticated. 

No one on the news has come close to describing what has really happened.  The college kid enlisted the aid of friends, relatives and even total strangers, to brow beat the parents into handing back the credit card without limits.  This is seen as a great victory, re-establishing the status quo and allowing the party to continue.  The rejoicing, however, is irrespective of the fact that the parents may shortly lose the house and have to spend their retirement savings to cover the bills being run up by junior.

If anyone is listening, the rest of the world is becoming concerned about our continued walk through fantasy land.  The Chinese press and foreign ministry made some rather terse comments during the dead lock* about the irresponsibility of the United States and the need for the world to find a mechanism other than dollars to run the world economy. (*I refuse to call this a crisis.  A crisis is when events you cannot control, overrun your normal life and routine without warning.  The present situation is a failure of will power to deal with reality.)

I am not a fan of Ayn Rand on almost any level. (Why, could be the subject of a several hundred page essay that I will not subject you to here.) However, everyone (even hopefully, me) can be correct some of the time.  I fully believe the quote that I have seen attributed to her, which goes, “You can ignore reality, but you cannot ignore the consequences of ignoring reality.”  I have often said to my children and business partners that refusal to make a decision is in fact a decision.  Not making a decision opens the door for events to overtake you, resulting in consequences not desired and often not foreseen.  This is what the politicians are doing with the debt, with our implicit consent.  They are refusing to address the true issues at hand while events are propelling us to places we probably would rather not go.

 

ferralhen's picture
ferralhen
Status: Silver Member (Offline)
Joined: Oct 14 2009
Posts: 151
complaining feels

complaining feels good.discussing feels good, lecturing feels good.listening feels good, conversing feels good...include whatever i left out...ok?

it all releases tension. once tension released...the issue causing tension feels not so emminent , not so important, not worth pushing back against.easier to live with, easier to kick to tomorrow just like the big guys do...feels good to come and post.... why aren't we using our time and energy to say these things to the people who can do something about it?who are these people? why don't we find out?

i really appreciate hearing from others out there dealing with this like i am...but my pragmatism is kicking in again..

why are you telling me? what do you hope i do if i believe just like you? or click on a thumb? i'm not saying stop talking.i'm saying why do you do it?stop and think about and answer to yourself.
i'm also saying why not spend even 50% of your discussing time working on answers. on talking to the people you elected. on doing the right thing that presents itself right now.on living more sustainably NOW.(how much stuff did you use today?consume never to be any more today...like gas?)

it just feels too many times to me like a home outwest surrounded by a forest fire, and the family inside sitting calmly at the table having a polite discussion/debate on the fire's..cause. and someone says but we are learning, hush and let us continue the discussion as the roof is catching fire.

i'm asking what is so effacatious about your comments that warranted spending time on it.?something i ask myself.allthe time...tho my homestead now ready to live sustainably.

the debt is there. what does that tell you? this system about tat it's end and this is the mad rush to make as much profit as one can before the new system shifts in....an IMF or world bank currency.totally digital.want to dicuss the mad rush...fine...but is it helping you to do so..?

and it's not about a new way, a new system a new earth, a new turning a new anything and it certainly isn't about a new prosperity. someone posted recently about wishful thinking..it is currently collapsing as we talk.

chris has alerted us all to several predicaments.one is the economical predicament. can a discussion on debt lessen it? can talk about enviroment clean it? can a disccusion on energy end the nuclear age?
what did you do today to help the 3 E's work better.? discussion is fine if it leads into action. but talking for talking in not walking the walk.

did you do anything today besides earn money?
i keep asking these kinds of questions here and i am always relieved to hear your answers on how you are doing the right thing..focus on doing.

i'd like to hear from those of you who quietly belong and have yet to comment.

Sterling Cornaby's picture
Sterling Cornaby
Status: Silver Member (Offline)
Joined: Sep 5 2012
Posts: 152
Very complicated feelings

ferralhen

I understand what you are getting at.  I ask myself similar things about the practical matters.  Most all of this heady stuff seems to be to boil down to “How long do we have before we collectively will no longer rely on this current system”.  Sadly, this is important to me because I am still deeply tied into the current system, as many are.

“The game of life" seems to have one set of rules, the current system that I am into up to my eyeballs, because I have lived in this system my entire life.  Now this system is breaking down, and I have been trying to transition to a new "system" of values.  This transition is very hard; what should I value?  Transfer savings to precious metals? Get out of debt ASAP? Learn to grow food on my little 1/5 acre lot? (I planted a garden this year) Build local social resources? And on and on.  A lot of this stuff is new to me, yet I have to tackle all of this and not get paralyzed doing so.

For example, I would LOVE to be independent of the banking system, and if I throw everything I have at getting out, it’s going to take 7-8 years to get rid of a $185k mortgage--- I am still a fairly young debt slave working in this system.  Will I have the time I need to do this?  Do I sale my house and rent, and when? Should I downsize? Downsizing would at most get me a $140k debt slave sticker, and still be more than 6 years out of a mortgage.  There is a part of me that would like to say where I am just because I have spent a lot of time getting gardening space installed, and I want to see the 6 fruit trees I planned last year produce fruit...  Where else can I, or should I go and have a fruit trees on "my" land being secured by my ownership? 

The point I am making is getting into this new game hard, most options are obscured, mostly because the old game is engineered to be very hard to get out of – we are intended for someone else’s duck dinner.  I feel like every year we have right now to prepare is a great gift. Yet to be able to get to the point I want to get to, I will simply run out of time that I need, even with the 1-2 year gifts of time I have already received.  Sadly, people who have not even heard the starting gun for this mess have already run out of time!

One night, not too long ago I had a dream where I was trying to get some place frantically, and a man was doing all he could to stop me, tackling me, pushing me down, etc.  In the mist of struggling with this man, a much older version of this same man walk up to us caring a black axe.  I thought that I was done for, but the older version of the man walked right up to me and handed me this black axe.  My dream at this point became a little vague, either the younger version of the man backed off or I fought him off with the axe; I don’t quite remember.  Either way, I was able to start running again.

After this dream, I could not stop thinking about it.  If fact, I bought an axe, painted it black, and it is setting next to my bed.  Every day I look at that axe, I spend at least an hour or two “doing” something that I believe will get me one step closer to my goal of getting me more resilient, or getting me more prepared for this turbulent world.  For example, I figured out the situation above; do what the bank wants and I will be paying off the mortgage for 20 years; do what I can do starting today with the resources I have; I can get it knocked out in 8 years.  I may not have this time, but I am going for it because I have to run somewhere.  Some might suggest other investments, and I will do some of that too.  Man, there is just so much to do and so little time!

In the meantime, I will get my fruit trees grown and figure out gardening better with more than my present one summer worth of experience.  I can keep these skills if I lose my present job & house.  If I keep my eyes open, and keep mentally nimble, I may find a quicker way out of debt serfdom.  Also, I hope that I know enough that if things do go really bad, that I will not spend much time in self depression; that I will be able to get up, reassess and keep going.

Like you said, we have got to do something practical.  But, my goodness, it is so very hard to figure out of all the good actions I could take, which ones will be the best to take for the little time I (and we) seem to have.

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