Individual Impact of Substantial Government Debt, Part One: Statistics

As stated at the end of my last post, I'm going to write a short series of posts about the impact of substantial government debt on the individual as the result of requests by a pair of my readers.

Every investigation of something first involves understanding exactly what you're investigating. As such, this post is all about statistics on the government debt of the United States Federal Government.

Our first question, then, is whether or not the debt of the U.S. Federal Government can be considered 'substantial.' I think by general consensus of U.S. citizens it can be considered such, but it would be a worthwhile exercise to determine exactly why.

As of this writing, the current national debt of the United States is at or around USD 15 trillion. You can check some more exact statistics here: http://www.usdebtclock.org/. This number can be corroborated at slightly higher or lower numbers all over the Internet, including at various sites run by government officials or government agencies.

The number seems pretty large, right? It's certainly more wealth than even the wealthiest people in the world possesses; for reference, the wealth of Microsoft CEO Bill Gates peaked at just over USD 100 billion.

However, to truly do any real comparison, we have to look at two things - ratio of debt to the GDP of the United States and similar ratios for other nations around the world. Some quick results...

The last known census data on the United States GDP put it at around USD 14.5 trillion in 2010. Some examination of Internet statistics for which there is no strictly empirical foundation show estimates of current GDP at about USD 15 trillion. This means that the ratio between the national debt and the GDP is about 1.0.

For some other developed nations, take a look at this rather revealing graph: http://en.wikipedia.org/wiki/File:Dept.svg.

From this, we can see that the United States has one of the highest debt to GDP ratios among the developed nations represented on this graph. It also has the largest total debt during the time of the last entirely reliable study in 2010, pulling ahead of Japan by USD .6 trillion.

I think we can then all agree that the debt of the United States Federal Government is substantial. It can also be seen that it is rising rapidly: the debt has increased by an estimated USD 6 trillion over the course of 2011 and early 2012. Considering that this is about two thirds of the total debt at the start of 2010, we can also consider the current upward trend in national debt to be substantial.

Now that we have a firm grasp on the problem, the next few posts will be about the possible impact of this on individuals. This analysis will attempt to be general enough so that it will hold in all developed nations with substantial government debt, but some portions of it will more than likely be specific to the United States and its citizens.

Anyways. I hope you have found this moderately enlightening. Until next time, folks!