Blogs » A Constitutionalist & Believer in Natural Law » Meaning of $1.1 Trillion Dollar Deficit

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Many people have heard this big number for a few days now, and most probably just let it pass over their data bank, because they could not envision or conceive what it really meant.

The best way to look at its meaning is to understand the income and debt of the United States. The National Debt started before 1910 at 2.6 billion and except for a few years continued to grow over 98 years to end close to $10 trillion dollars on January 1, 2009. The United States single year of Highest revenues occurred in 2007, it was 2.57 Trillion Dollars. And in 2008 revenues were 2.52 trillion. So the United States owed about 4 years of total income.

The United States is moved into a stage of spending more than half its income in a single year. Increases it debt in one year that in the past took the average of 10 years.

An analogy is to look at the national debt as a credit card. Over the last 10 years you have kept adding to your credit card debt till you owe four years of your income to the credit card company. You have used the debt to maintain a certain standard of living; often using credit to pay for gifts.

Then you made a decision that increases the debt on your credit card by half of your income. You call the debt increase an investment in family’s future (you use it to pay for college, tutoring, or image consultant, and etc). Your monthly debt payment to the credit card company keeps going up, yet you do not slow down your debt spending. In less than 1 year you double your total debt.

The credit card payments now are about 75% of your bring home income. The credit card company, fearing your inability to pay the total debt, stops allowing an increase of credit. Now, you are the slave to the debt. You must reduce your standard of living if possible in an attempt to pay down the debt.

When the United States can no longer sell its debt, the dollar rapidly devalues. As it values declines, citizens must pay at the same percentage point pay more for products and services.