The U.S has the largest economy in the world with a gross domestic product (GDP) estimated to be more than $15 trillion for 2012, about as large as the combined total of the second- (China), third- (Japan), and fourth-largest (Germany) economies of the world – and the United States is still recovering from the effects of the 2009 worldwide economic collapse. For example, the United States has the following attributes when compared to the rest of the world: However, when looking at such large numbers, it is helpful to have a different perspective to get a true picture. These examples suggest that the current situation of the United States is very bad, and the country is headed over the fiscal cliff unless immediate steps are taken to pay down debts. Energy Information Administration estimates “technically recoverable reserves of 218.9 billion barrels” for the country today – or about 27 years’ worth of consumption at the current rates. The debt is equivalent to approximately 191 billion barrels of oil at $85 per barrel. Almost All of the Recoverable Oil Remaining in the United States.Geologists estimate that all gold produced in the world to date to be around 10 trillion ounces. At a gold price of $1,681.80 per troy ounce, the federal debt is equivalent to 9,652,726,026 troy ounces. All of the Gold Produced in the World to Date.In other words, if dinosaurs had been making these payments, more than half of the outstanding balance would remain unpaid. 512 Million Years at a Rate of $1 Per Second.The national debt is so large, in fact, that repayment would take: In early November 2012, federal debt was more than $16 trillion, a number so large it is difficult to comprehend in everyday experience. Sign Up Nowīut many questions remain: What are the facts? How worried should you be about your future? Is your generation passing on an unconscionable debt to your children and grandchildren? The U.S. For $79 (or just $1.52 per week), join more than 1 million members and don't miss their upcoming stock picks. Motley Fool Stock Advisor recommendations have an average return of 618%. Others are more sanguine, expecting the debt level to recede as the economy improves, foreign wars end, and unrestrained growth in healthcare is curbed. Some analysts claim that the debt is a “ticking time bomb” that will lead to the collapse of the economy, higher unemployment, and drastic cuts in future government services and programs. But debt has generally been on the rise since 1974. The level of debt rises and falls depending upon whether there is an annual budget surplus or deficit. In fact, since that time, there has been only a single year – 1836 – during which there was no federal debt. Constitution, and has liberally used this power since 1791. The Power of the Federal Government to Incur DebtĬongress was given the power to borrow money on the credit of the country under Article 1 Section 8 of the U.S. It’s easy to forget that credit and debt have been the basis of trade for more than 5,000 years, even before the appearance of money. The idea of the United States Federal Government borrowing is particularly scary, triggering images of “foreigners” taking over the country and foreclosing on valuable assets.
Caricatures of debt collectors, such as the mafia shark who breaks the legs of delinquent borrowers, or Shylock, the moneylender of the “Merchant of Venice” who required a “pound of flesh” as security on a loan, haunt our dreams and reinforce Benjamin Franklin’s advice that one should “rather go to bed without dinner than to rise in debt.” “Debt” is one of the most frightening words in the English language, conjuring up visions of peonage, deprivation, and prison.
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