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How Well Is The United States Managing Its Budget?

Question: Do you know how much tax revenue the United States collected last month?

Next Question: Do you know how much the United States spent last month?

These are numbers are available to you simply by visiting Congressional Budget Office website HERE.

Just like the equation: INCOME – OUTGO = EXACTLY ZERO ™ applies to you and me, it also applies to governments and businesses.

In January, the CBO estimates that the U.S. spent $10 billion more than was collected. For the first four months of fiscal year 2014, we have spent $184 billion more than was collected.

Here are some reasons you should care about these numbers – especially if you are a citizen of the U.S.

  1. Increased deficits means more national debt. And the taxpaying citizens will have to pay this interest as well as repay the debt (which is in excess of $17 trillion).
  2. No balanced budget requirement for the U.S. means deficits will continue. Just as having no personal budget will tend to lead to overspending. I, for one, would love to see some requirement that my beloved country would have to save money and follow the I Was Broke. Now I’m Not. Ladder!
  3. You are already feeling the impact of the national debt, and it won’t be getting lighter. There is relentless borrowing from the Social Security trust fund. Don’t just take my word for it – read the report issued by the Social Security Administration HERE.

I’m only voting for representatives who demand a balanced budget. I feel that would be most “representative” of me – and will help the U.S. continue to prosper into the future.

Current Events: United States Government Financial Dealings

If you are a resident of the United States of America, you should be paying attention to the financial dealings of our leaders.

Here’s why: Their financial decisions WILL affect you!

Here are some examples:

  1. Interest Payments  The national debt is just like YOUR debt – there is a BORROWER (the U.S.) and there is a LENDER (U.S. Citizens, Other Countries, and Outside Entities)  Like any debt, interest must be paid. The United States just completed its 2013 fiscal year with interest payments of $415,688,781,248.40!  Here’s a great question to ask: What ELSE could we have done with $415 billion?
  2. Credit Rating Reduction  The U.S. has had its debt downgraded by Standard & Poor’s on August 5, 2011 and Fitch has warned of a possible downgrade in October 2013. This will increase the amount of interest the U.S. will have to pay on new debt issues.
  3. You and I (the taxpayers) will have to pay up (and so will our children and grandchildren) Budget doesn’t force “Income – Outgo = Exactly Zero”  In fact, we PLAN to spend more than we make each and every month/year/decade. This is ridiculous and reflects a lack of financial education. Spending more than I make for months and years would never work for me personally, and it definitely won’t work for our government. I simply do not understand why a “balanced budget” is not a written and followed law.
  4. Your money is devalued  As the government prints more money, it devalues existing money. MANY MANY MANY times in history, this “let’s just print more money” approach has led to hyper-inflation and currency collapse (Argentina 1991 and Mexico 1994 are two examples – Greece, Cyprus, Ireland, and Spain are all experiencing similar issues leading to major devaluation)

Here are some helpful websites that can help one better understand the debt held by the United States:

  • Current U.S. Debt  This is the official debt number from the U.S. Treasury.
  • Monthly U.S. Budget Review  This is the official math from the non-partisan Congressional Budget Office (CBO)
  • U.S. Debt Clock  Provides many different perspectives of the current financial position of the U.S.

Actions YOU can take:

  • Email your elected representatives Tell them you want them to make wise financial decisions that position the U.S. to have strong financial fundamentals: (1) a balanced budget, (2) financial reserves, (3) debt reduction plan, and a (4) economic investment plan
  • Live these principles in your own life  We elect people who are a direct reflection of who we are. Right now, as a collective group, U.S. citizens spend more than they make. Consequently, so does our government. What if we, as a collective group, lived within our means? I believe we would elect leaders who represent those same values. By the way, this is not a Republican versus Democrat issue – it is a “We the people” issue!

U.S. National Debt Update – December 2013

The US National Debt has increased by $755,668,013,559 since our last update on January 2013.  Another eleven months, and the United States has dropped another cool $755.7 billion in the hole.

National Debt as of 12/02/2013

$17,205,406,679,181

That is an increase of $2.347 BILLION PER DAY since our last update 322 days ago.

BUT – FINALLY – There is SOME good news!

According to the Congressional Budget Office (CBO.gov), the United States has closed the deficit gap by more than 50-percent!

CBOFiscalGov2013

The deficit gap has been closed by several factors, including:

  • Increased tax revenues from a recovering economy
  • Increased tax revenues from new taxes
  • Decreased expenditures – due to sequestration

You can read the CBO’s entire report HERE.

If you aren’t already, I encourage you to become an informed taxpaying citizen. You CAN make a difference in the future decisions that are made regarding the fiscal decisions your elected leaders make.

United States Federal Debt – “Interest”-ing Facts

Here are some facts I found interesting about United States Federal Debt.

  1. 1835  The last time the U.S. federal government was “debt-free.” That’s a LONG TIME to be in debt!
  2. Prison  People used to go to PRISON for not repaying debts. It isn’t possible to put a government in prison.
  3. It’s been worse  The U.S. was in more debt (as a % of GDP) at the end of World War II than it is right now. There’s hope!
  4. Zombie Debtor  A British term for people who make “interest-only” payments.
  5. $52,203  Amount of debt owed by each U.S. citizen if the debt were split equally.
  6. $50,100  Average amount of debt currently owed by each U.S. citizen – including mortgage, credit cards, student loans, vehicles, etc.

Which one of these do you find most compelling/interesting?

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U.S. National Debt Update – January 2013

The US National Debt has increased by $198,438,256,931 since our last update on November 11, 2012.  Another two months, and the United States has dropped another cool $198 billion in the hole.

National Debt as of 1/14/2013

$16,449,738,665,622

That is an increase of $3.101 BILLION PER DAY since our last update 64 days ago.

Our debt continues to spiral out of control like a person who is on a crazed spending spree. That NEVER turns out well!

I continue to stand by the following statements.

Whether we choose to address this problem as a nation or not, we WILL have to deal with it. We are really being faced with one of two decisions:

  1. Face the problem now by making some really tough choices  Like reducing some great programs or potentially eliminating some of them. NONE of us like to reduce spending. It is NO FUN. It STINKS. But we all have faced this in our personal finances before. Of course, we want to let our children participate in any activity they enjoy, but sometimes we have to say NO because of the costs! Of course, many people would love to have a huge house with every amenity known to mankind, but sometimes it is just not possible to carry the financial burden required to maintain it!
  2. Let the problem fester until we are FORCED to make the tough choices  Whenever I personally have let the clock run out on tough financial decisions, I have found that my options have been severely reduced and the pain is much greater. I’ve always found myself saying, “I wish I had made this decision sooner.” (NOTE: This is where Greece, Ireland, Spain, and several other countries are at this point. Decisions are being made that they no longer have full control of)

I wonder which decision the American citizens will make.

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U.S. National Debt Update – November 2012

The US National Debt has increased by $335,485,950,772 since our last update on August 9, 2012.  Another three months, and the United States has dropped another cool $335 billion in the hole.

National Debt as of 11/11/2012

$16,251,300,408,691

That is an increase of $3.568 BILLION PER DAY since our last update 94 days ago.

I continue to stand by the following statement.

Whether we choose to address this problem as a nation or not, we WILL have to deal with it. We are really being faced with one of two decisions:

  1. Face the problem now by making some really tough choices  Like reducing some great programs or potentially eliminating some of them. NONE of us like to reduce spending. It is NO FUN. It STINKS. But we all have faced this in our personal finances before. Of course, we want to let our children participate in any activity they enjoy, but sometimes we have to say NO because of the costs! Of course, many people would love to have a huge house with every amenity known to mankind, but sometimes it is just not possible to maintain the financial burden required to maintain it!
  2. Let the problem fester until we are FORCED to make the tough choices  Whenever I have let the clock run out on tough financial decisions, I have found that my options have been severely reduced and the pain is much greater. I’ve always found myself saying, “I wish I had made this decision sooner.”

I wonder which decision the American citizens will make.

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U.S. National Debt Update – August 2012

The US National Debt has increased by $46,233,894,979 since our last update on July 11, 2012.  Another month, and the United States has dropped another cool $46 billion in the hole.

National Debt as of 8/9/2012

$15,915,814,457,919

That is an increase of $1.594 BILLION PER DAY since our last update 29 days ago.

Whether we choose to address this problem as a nation or not, we WILL have to deal with it. We are really being faced with one of two decisions:

  1. Face the problem now by making some really tough choices  Like reducing some great programs or potentially eliminating some of them. NONE of us like to reduce spending. It is NO FUN. It STINKS. But we all have faced this in our personal finances before. Of course, we want to let our children participate in any activity they enjoy, but sometimes we have to say NO because of the costs! Of course, many people would love to have a huge house with every amenity known to mankind, but sometimes it is just not possible to maintain the financial burden required to maintain it!
  2. Let the problem fester until we are FORCED to make the tough choices  Whenever I have let the clock run out on tough financial decisions, I have found that my options have been severely reduced and the pain is much greater. I’ve always found myself saying, “I wish I had made this decision sooner.”

I wonder which decision the American citizens will make.

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U.S. National Debt Update – July 2012

The US National Debt has increased by $109,763,882,862 since our last update on June 5, 2012.  Another month, and the United States has dropped another cool $109 billion in the hole.

National Debt as of 7/11/2012

$15,869,580,562,940

That is an increase of $3.05 BILLION PER DAY since our last update 36 days ago.

One day, the credit card WILL run out, and America will face what many countries have faced in the past – massive budget cuts and slashed programs and a crushed economy.

In my own personal life, I found that it was a lot better to TAKE CONTROL OF THE SITUATION before SOMEONE ELSE DID! Shouldn’t we demand the same of elected leaders – that they take control NOW – before the country is forced to?

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U.S. National Debt Update – June 2012

The US National Debt has increased by $84,945,657,221 since our last update on April 22, 2012.  Another month, and the United States has dropped another cool $85 billion in the hole.

National Debt as of 6/5/2012

$15,759,816,680,078

That is an increase of $1.93 BILLION PER DAY since our last update 44 days ago.

Although the rate of debt acquisition has slowed, the credit card apparently still has some room left before we hit the limit …

I’m doing something about this issue. I’m wondering how many others are willing to do their part.

What are YOUR suggestions for addressing this?

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U.S. National Debt Update – April 2012

The US National Debt has increased by $177,705,716,826 since our last update on March 13, 2012.  Another month, and the United States has dropped another cool $177 billion in the hole.

National Debt as of 4/22/2012

$15,674,871,022,857

That is an increase of $4.4 BILLION PER DAY since our last update 40 days ago.

The credit card apparently still has some room …

My question remains:  At what point in time will this type of spending stop?

I believe the answer remains the same – When the citizens of the country as a collective whole start managing their own money responsibly!  When we not only talk the talk but walk the walk!

What are YOUR suggestions for addressing this?

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U.S. National Debt Update March 2012

The US National Debt has increased by $93,188,029,341 since our last update in January 13, 2012.  Another month, and the United States has dropped nearly another $100 billion in the hole.

National Debt as of 3/13/2012

$15,497,165,306,031

That is an increase of $4.9 BILLION PER DAY since our last update 36 days ago.

QUESTION: Have you ever lived this way – where you used a credit card or some other form of debt to spend money that you did not have?

My question remains:  At what point in time will this type of spending stop?

I believe the answer remains the same – When the citizens of the country as a collective whole start managing their own money responsibly!

What are YOUR suggestions for addressing this?

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U.S. National Debt Update

The US National Debt has increased by $93,188,029,341 since our last update in January 13, 2012.  Another month, and the United States has dropped nearly another $100 billion in the hole.

National Debt as of 2/6/2012

$15,321,143,716,542

QUESTION: Have you ever lived this way – where you used a credit card or some other form of debt to spend money that you did not have?

My question is this:  At what point in time will this type of spending stop?

What are YOUR suggestions for addressing this?

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U.S. National Debt Update

The US National Debt has increased by $505,581,392,352 since our last update in September 2011.  Another quarter and we have dropped another $500 billion in the hole.

National Debt as of 1/13/2012

$15,227,955,687,201

Our nation’s leaders will soon be entering into the same conversation that they had just a few short months ago – because we are about to hit the debt limit AGAIN!

As was known by EVERYONE at the time we increased the debt limit, issuing the equivalent of another credit card to pay the bills of another credit card did not work.

My question is this:  At what point in time will this type of spending stop?

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September National Debt Update

This is a guest post by Mark Asbell, who recently became debt-free following the principles of I Was Broke. Now I’m Not.

The US National Debt has increased by $84,414,120,840 since our last update in August 2011.  Another month, another BILLION DOLLARS IN THE HOLE.

National Debt as of 9/14/2011

$14,722,374,294,849

When I was going broke I’ll never forget the moment I realized the hole I was digging was getting over $400 deeper every single month.  That doesn’t even count the large chunks of debt I got into in order to make big one time purchases.  Just our normal monthly expenses were $400 per month more than our monthly income.  At that time $400 a month was less than 1% of my annual income and my total debt was less than 4 times my annual income (including the mortgage).  So I was able to keep getting more and more credit in order to sustain our deficit UNTIL…  Lenders stopped giving me more credit.  We were maxed out.  We couldn’t pay what we already owed, so why would anyone lend me more?

The United States government is facing the same dilemma on a much grander scale.  Their total debt is 7 times their annual income (Gross Domestic Product), and the hole is getting deeper by almost 4% of their annual income EVERY SINGLE MONTH.  I’m no economist but I’ve been to broke and back and the US numbers are wayyy worse than mine were.  I know what I had to do to dig out of the hole, so what does digging out of the hole look like for the government?

Mark Asbell is a key member of the I Was Broke. Now I’m Not. team and has a blog focused on helping couples strengthen both their finances and their marriage – www.markasbell.com – For Richer or Poorer.

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August US National Debt Update

The US National Debt has increased by $125,767,125,033 since our last update in July 2011. This is the first update since lawmakers in Washington came to terms on a debt deal.

National Debt as of 8/22/2011

$14,637,960,174,009

Now that a deal is in place for the country, what is it that you are needing to do in your personal finances regain control?  Is it a drastic cut in discretionary spending?  Do you need to make a slight adjustment in spending so you can save or give more?  It is time to take your next step!  I challenge you to write down the next big step you need to take with your personal finances, and list action steps that will allow you to take that step.

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