18 Crazy Things You Didn’t Know About the National Debt

1. The United States national debt is the amount of money owed by the government to foreign and domestic holders of U.S. debt instruments like US Savings Bonds, Treasury notes, Treasury bonds, Treasury bills and Treasury Inflation Protection Securities. The national debt is divided into publicly held debt, and debt held by government trust funds like Social Security.

2.  When Barack Obama took office on January 20, 2009, the national debt stood at $10.6-trillion, which was approximately 83% of the gross domestic product.  That is the highest percentage of debt relative to GDP since 1951.  By 2012 the US national debt is projected to rise even higher, to 97% of the GDP.

3.  It could be worse:  US national debt reached 130% of GDP immediately following World War II.  Today, at 83%, America’s debt as a percentage of GDP ranks the United States as only the world’s 11th worst debtor nation.  Believe it or not, two of the eight largest economies in the world currently fare even worse – Italy is ranked 6th (104%) and Japan ranks 2nd (170%).

4.  As for the worst?  Zimbabwe is currently the world’s worst debtor nation with debt equivalent to 241% of its GDP.  This has led to an epic case of hyperinflation that has completely destroyed their economy.

5.  Then again, it could be better too:  The two countries in the world with the lowest debt as a percentage of GDP?  Libya (3.6%) and Oman (2.4%).

6.  President Obama’s budget plans call for running the national debt to $16.2-trillion by 2012, and an astounding $20-trillion by 2015.  The projected run-up in the national debt from 2009-2015 is equivalent to the total debt accrued under the previous 43 presidents combined.

7.  It took the U.S. government 191 years – from 1791 until 1982 – to run up its first trillion dollars in debt.

8.  It only took four years after that for Congress to add another trillion dollars to the total.

9.  As of July 2011, the national debt stood at $14.3-trillion. That’s equivalent to roughly $47,000 for every man, woman, and child currently living in the United States.

10.  Big numbers:  As a point of reference, if 14.3 trillion $1 bills were stacked on top of each other, they would stretch all the way to the moon.  And back.  And over halfway to the moon again.   Put another way, if you brought $1-trillion in crisp one-dollar bills to the bank and you handed the teller a dollar every second, it would take 32,000 years to completely transfer the money.

11.  Don’t blame the rising debt on inflation:  Between 1946 and 1982, the national debt was virtually unchanged, even with inflation taken into account. However, all that changed in 1983.  Since then, with the notable exceptions of 2000 and 2001, the national debt has crept upward at an exponential pace.

12.  Our founding fathers weren’t adept at managing debt either.  In 1791, the national debt was a mere $75 million — but that is equivalent to more than $5.2 trillion in 2011 dollars if you take into account then-year debt relative to the GDP.

13. The national debt was actually paid off completely on January 1, 1835, under the presidency of Andrew Jackson.  That’s right.  The national debt was actually eliminated; the surplus that year was distributed to the states.   It remains to this day the only time in history a major country has been debt free.

14.  The idea of balancing government budgets is not a new one.  One of Rome’s greatest orators and statesmen, Cicero (106-43 B.C.), stated in 55 B.C., “The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.”

15. Since 1917 when it passed the Second Liberty Bond Act, Congress has limited the amount of money the government is allowed to borrow without receiving additional authority from Congress.  Since 2001, Congress has approved nine increases in the statutory debt limit.

16.  At 24% and 20% respectively, China and Japan are the two biggest holders of our foreign debt.  Not inconceivably, this potentially exposes the United States to economic blackmail, although such a move would be economic mass suicide for everyone, as it would force a run on the dollar and severely erode its value.

17.  I know what you’re thinking: but, Len, what if the Treasury paid our creditors with all the gold in Fort Knox? It’s a nice thought, but it would have the same impact as spitting into the ocean; unfortunately, the book value of US Treasury-owned gold is only $11-billion at current prices.

18.  “Okay.  Will they take a personal check?”  Cute.  Although our creditors won’t apply your check to our national debt, the US government most certainly will.  Make it payable to the Bureau of the Public Debt, and in the memo section, notate that it is a “Gift to reduce the Debt Held by the Public.” Mail your check to:

Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188

Now that’s crazy, don’t you think? 

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