So many people seem to be ignoring the debt that the US and many countries have. In the US, it’s so bad the US has to take loans to pay it’s loans. That would be like you being so deep in debt that you mortgage your house to pay on your debt. Most of us today know this is unsustainable. Eventually the money you borrowed will run out, you will have no more collateral and you will have to default. Well the US has no collateral, but people still trust they will pay the money back. So they don’t have to worry about defaulting. In theory at least.

Today the us debt is over 14 trillion, that over 45 grand for every American. Half of Americans don’t make enough money to pay taxes so that’s almost 100 grand for every tax payer in the US. People say “well we can borrow a lot more, after all we haven’t reach 100% of GDP yet.” The problem with the GDP calculations is they include government spending (excluding debt). Also GDP doesn’t really tell you how much people are earning just how much money is going through the economy. In my opinion the National Net Income is a better number to compare debt to. It measures all the money earned in a country, including government. The National Net Income of the US is about 9.7 trillion. That means if all the money earned by every person, every business and government in the US was used to pay the debt, it would take over a year to pay it off.

This wouldn’t be a large deal if our population was increasing at a high rate allowing us to make more income to cover the new debt. However the population growth in the US is just slightly above replacement. Which means we are piling even more debt on the same number of people. At the end of the day we can’t borrow forever. On the current path there are two solutions. You could do what was done in the past by some governments and just print our way out of debt. Essentially making your money worthless so your debt is very small. Or we can pay it off some how. If this isn’t done default will eventually happen. On top of which, option number one is essentially default, not only does it steal from every american making our money worth less, but it steals from the people who lent us the money as well. I don’t think it takes a genius to figure out which one the US government will eventually choose.