Suppose the U.S. Government was a Household

Suppose the U.S. Government was a normal American household. What would it's income, expenditures and liabilities look like? Using the handy U.S. Debt Clock, we can see the following for Household USA:

2009 Income (ytd): $16,597

• Adjusting for the rest of the year, this comes out to about $19,900.
  

2009 Expenditures (ytd): $29,226

• Adjusting for the rest of the year, this comes out to about $35,071.
• About $3,624 of the $35,071 is interest to finance debt.
• The household is running a debt of $15,000 this year (or 75% over budget).
  

Current debt due to borrowing: $110, 329

• This is about 5.5 years income at $19,900 per year.

Future obligations for medical care and retirement (unfunded): $976,390

• This is about 49 years income at $19,900 per year.
• Note that this 49 year figure would exclude expenditures for anything else during those years.
  

Clearly the debt and future obligations will never be repaid out of income. And eventually lenders will view the household as too large a risk and refuse to lend it any more money. This means that the household will eventually be left with the following options:

1. Sell or forfeit assets to cover the difference (fire sale or foreclosure).
2. Repudiate the debt (bankruptcy).
3. Print money (theft).

Note that normal households cannot print money. It's considered counterfeiting. But governments can by merely turning up the printing presses. However it's still equivalent to counterfeiting and is actually a form of theft. It leads to inflation and a corresponding devaluation of the currency. In other words, personal savings will be devalued to whatever extent the government resorts to this. If the government prints enough money to double the money supply, everyone's savings accounts will effectively lose 50% in value. So printing money to cover government debt ends up being the same as stealing it out of personal bank accounts.

And this doesn't just hurt fat-cats with big bank accounts. Paychecks don't go up. Social Security checks don't go up. Retirement pensions don't go up. OK, they go up some, but not enough to cover the difference. And yet prices for things like food, clothing, fuel and housing all do go up. So it's also theft of value from everyone's paycheck.

Just ask the Germans:


All figures have been normalized by dividing total U.S. figures by the number of U.S. Taxpayers (approximately 108,600,000).

Year to date figures were converted to approximate annual figures by multiplying YTD figures by 1.2.