Tuesday, February 1, 2011

Fiscal Sanity vs. Fiscal Insanity

As of February 1, 2011, U.S. public debt stood at $14.056 trillion.  Of this, $9.413 trillion is tradeable debt held by the public, both domestic and foreign.  The remaining $4.644 trillion is held by federal trust funds and other government entities.

The population of the U.S. is about 308 million.  Per capita U.S. debt amounts to almost $46,000 per capita.  If we exclude intragovernmental holdings, per capita debt falls to a still staggering $30,500 per person.  Moreover, we continue to pile up debt in excess of one trillion dollars a year, another $3,250 per person.

Contrast the U.S. with Hong Kong, whose government rarely incurs a budget deficit.  As of December 31, 2010, accumulated surpluses, the government’s financial reserves, amounted to US$75 billion.  With a population of about 7 million, financial surpluses come to about US$10,700 per person.  Total fiscal reserves almost amount to two years of government spending.  Investment returns on the reserves help keep taxes low.

Food for thought.

1 comment :

david n said...

fair calculations. But for the very many who live in NY, CA, IL, etc, you really should include the value of state, city, and authority debt. Measured in bazillions. I don't know how much state/muni/authority debt there is in Greece, but I know it adds a s***load to what we have. Whether our combined state/local pension crisis is worse than theirs, I think so, but wait 10 years and Moody's will figure it out foryou.