The Bailout’s Impact: Uncle Sam’s debt is YOUR debt
September 29, 2008
Comparing the Nations Debt to the Average American family’s Debt
With figures like a $700 billion bailout and $5.3 trillion in mortgage debt, it’s getting a little hard to keep all the zeros straight. Let’s take a look at how that astronomical debt compares to the Average American family’s debt. According to the U.S. Census, there are about 110 million households in America.
Taxes – The average household makes $50,233 annually, and pays $9,300 in federal income, social security and medicare taxes. Add $3,000 in average real estate taxes, and $700 in annual sales taxes for a yearly household tax burden of $13,000.
Personal Debt – This average household owes $69,000 on its real estate mortgage, which has another 29 years left on it and carries annual payments of $8,500. The household owes $8,000 in credit card debt and another $10,000 in other consumer debt (auto loans, etc.). That doesn’t leave a lot of discretionary income.
That’s the “real” average debt for the average American household. Now let’s turn to the “invisible” debt– this is what we owe as a nation in debt– broken down by household. You, the taxpayer, don’t get a monthly notice for it, but it’s real debt nonetheless.
National Debt – The average household owes $88,000 on the national debt of about $9.6 trillion. Foreign governments hold about $2.6 trillion in U.S. Treasury securities (how the federal government borrows money). Of that amount, the average American household owes $4,563 to the Chinese government, and $5,454 to the Japanese government. The $700 billion financial market bailout will add another $6,363 to each householder’s debt.
Is it any wonder that the average savings rate in the United States now stands at a negative 1% ? When candidates talk about “Main Street” versus “Wall Street,” this is the Main Street they are talking about. How much more debt can householders withstand?
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