The Escalating Debt Spiral
This is what we wrote way back in 2001. It is even more important today!
Do you know whose face is on $1,000 bill? President Grover Cleveland. You probably haven’t seen much of him lately since that bill hasn’t been in circulation since 1969.
In 1897, the last year of Grover Cleveland’s presidency, our national debt was just over $1.8 billion dollars. as Grandpa would say, that was back when a billion was really worth a billion.
How much is a billion? How about $5 billion? A tightly packed stack of crisp new $1,000 bills totaling $5 billion would be 315 miles tall. The Space Shuttle would have to make a detour to keep from knocking it over.
Five billion is a big number. But how about this one? $5,742,131,133,217.67. No, it’s not the salary of a major league baseball player. It’s was the size of our national debt as of April 10, 2001 at 8:54 AM. Five trillion, seven hundred forty-two billion, one hundred thirty-one million, one-hundred thirty-three, thousand, two-hundred seventeen dollars and sixty-seven cents. It takes about ten seconds just to say that number out loud. Were we to make a stack of $1,000 bills totaling $5 trillion, the Starship Enterprise would have to detour around it. Our national debt is truly going where no debt has gone before.
How long would it take to pay it off? If every person in the United States (that’s about 284 million people) decided to pay off just the first $5 trillion at the rate of $1.00 (one dollar) per second, it would take us around 160,000 years. Even if that scenario were remotely possible, it’s complicated by the fact that our national debt is growing by an average of $154 million dollars per day. Per day.
Approximately $1 trillion of our national debt is consume debt, credit cards, department store cards and revolving charge accounts. Last year Americans paid over $65 billion dollars in interest alone on these accounts. Nearly 50% of American households report having difficulty making their minimum monthly payments, making bankruptcy an all too familiar option. It is estimated that bankruptcy filings in the United States will exceed an all-time high approaching 2 million in 2001.
We may not be able to affect the national debt. Yet as individuals we can resolve to become Debt Free. By tracking and trimming expenses, setting financial goals and putting compound interest to work for us, we can achieve and maintain financial freedom.