Our Shared Deficit

While a somewhat popular topic in terms of importance or when discussing threats to our nation, I believe that the national debt does not get the attention it deserves. To put it starkly, debt payments on our shared national debt is over 1 trillion, that is T for trillion, dollars a year. This expense is quickly becoming the biggest line item on the debit side of our national ledger, Trump's ridiculous statements that he wants to spend $1.5 trillion next year on defense aside.

First, I commented on this subject way back in early 2011. In that post I attempted to explain the research and information I had encountered before composing my commentary. In essence, I related that, at the time, 40% of the debt was owned by one United States Government agency over another, that, in essence we owed ourselves 40% of the debt. As an example, I had cited the accumulation of monies paid into Social Security that hadn't been paid out to beneficiaries yet.

The other 60% was held by various banks in America and around the globe. Upon learning this I commented that perhaps the prospect of those banks "calling our loans" was preposterous considering that bankrupting the United States would do great damage to the world economy as well.

Here is a link to that post.

https://wurdsfromtheburbs.blogspot.com/2011/02/deficit-components.html 

Sadly, perhaps our politicians believed that as well, as, even though I go on to say that we need to begin having serious discussions about the trend that had added an average of $1 trillion each year to the overall debt from 2002 to that year 2011, (the national debt in 2002 was a bit over $6 trillion, 9 years later in 2011, it was close to $15 trillion), the trend has only worsened since.

Here is a link to a chart that I found which goes to 2023.   

https://www.thebalancemoney.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287

It is startling! 

From 2011 to 2023, 12 years of budgets, the debt increased by over $19 trillion, an average of over $1.5 trillion each year. The chart also provides a column detailing the major event that may partially or primarily have caused the debt increase. Another column of this chart compares the ratio of national debt to GDP. Again very interesting data.

The last link I will supply is to access the current US debt clock. It is a real time estimate of our overall debt, with the last few days, increase or decrease, and the current number, in a clock type of format. As you will see, it is now about $38.6 trillion, another $4 trillion in the last 2+ fiscal budgets. (The fiscal year starts in October, so fiscal year 2026 is only 3 months old). 

https://www.us-debt-clock.com/ 

OK, so let's talk numbers.

Here is a current breakdown of who owns our debt. I am not sure where I got this data as I found it a few weeks ago, but I do remember thinking that it was relatively current as of fiscal year 2025. It appears that even more of the debt is held by America, less by foreign entities, and that Japan is the foreign country holder of the most debt, not China as some people might think. 

Breaking Down US Debt Ownership:

• 40% - US investors and institutions

• 20% - Social Security, Medicare, and other US agencies

• 13% - The Federal Reserve

• 25% - Foreign investors (only!)

• 3-4% - China (much less than most people think!)

 

Returning to that year by year debt chart, I especially focused on the debt to GDP ratio. As you see, this number doubled during WW2, surpassing the 100% mark in 1945 through 1947. At that point, even though the debt continues to increase, it does so very slowly. It stays below $300 billion, that is B for billion, from the mid 1940's all the way until 1963, then takes another 9 years, until 1972, to get to $400 billion. And, even though the debt does start to rise more quickly, reaching just short of $1 trillion by 1981, the debt to GDP ratio continued to drop. Remember, it was over 100% in 1947, but fell steadily through the 50's, 60's, and 70's to a low of 31% in that same 1981.

We wouldn't sniff such a low ratio ever again.

I have often commented that supply side economics was the beginning of the end for middle class buying power. While cause and effect are certainly hard to prove, it was during the Reagan presidency that this economic philosophy took hold. Remember, until the tax cuts that went along with supply side economics, the idea being to give the rich more money which would "trickle down" to the income classes below, tax rates for the rich were 50, 60, even 70%. 

In other words, the monies paid in taxes by the wealthy all during the 50's, 60's and 70's, trickled down much more efficiently through massive public work projects like the interstate highway system, and by keeping taxes for the not so rich reasonable, not to mention that the corporate structure did not exist yet, a system that has encouraged large amounts of money to be hidden in offshore accounts, untaxable. 

By the time Reagan left office in 1988, our national debt had doubled plus, from just under $1 trillion to over $2.6 trillion, but worse, the debt to GDP ratio had risen from that low of 31% to 50%.

Four years of Bush 1 added another $1.5 trillion to the debt while the ratio hit 61%.

Clinton's terms were better, adding another $1.5 trillion but over 8 years, while that ever important ratio dropped back into the mid 50% range.

Under Bush 2, the debt soared due to the War on Terror after the horrific attacks on 9/11. This is when we began our debt increase average of over $1 trillion per year. Remember, it took until 1981, over 200 years, to get to that first trillion dollar debt mark.

Bush 2 added $4.5 trillion in 8 years, ratio climbed to 68%. Then came the economic meltdown of 2008 which caused Obama's numbers to be even worse.

During Obama's 8 years, the national debt increased another $9 trillion and the debt to GDP ratio broke the 100% mark in 2014, staying over 100% ever since.

Trump's first term added another $8 trillion to the debt, COVID being the leading cause, then almost $7 trillion more in the first 3 years of Biden's term, also partly due to COVID. There were also stimulus packages under Trump and Biden that contributed to the now over $2 trillion, per year increase in the debt, with the debt to GDP ratio now over 120%.

So, what is the solution.

Well, first, we have to stop blaming our elected officials. We elected them, so if we really wanted national debt reduction, we would not reelect people who do not deliver. 

But, it is also possible that electing people who were serious about reducing the debt, won't work either. In the case of the current administration that has talked about a balanced budget, and has slowed the pace of debt increase a bit through the chaotic tariff policies (never mind if you think the American businesses and citizens shouldn't be paying more money as tariffs are a tax). Although, slowed is defined as only $500 billion dollar deficit in the first quarter of the new fiscal year, down from $600 billion for the same quarter last year. 

That still equates to over $2 trillion in new debt if we match that number, and may well be worse if Trump actually sends checks to 50 or 100 million Americans this summer, thereby negating the increase in tariff revenue. Again, in this isn't just a knock on Trump, but give the people money in an election year seems a far more compelling strategy for politicians of all stripes.

I have said repeatedly that income inequality, the fact that the richest in America own a disproportionate percentage of the wealth, while the bottom 50% own very little is a serious threat to America. And, while it is clear that the GOP advocates for policies that do nothing to reduce this situation, the fact remains that the rich have gotten richer under every administration, Democratic or Republican, since supply side economics has become our guiding principle.

So, yes, while many trillions of dollars of our national debt were the result of the economic meltdown of 2008 and the COVID pandemic, both of which resulted in massive amounts of money distributed to both save our large financial institutions, and to assist everyday people to pay their bills, the simple fact is that far too many people live on the edge, financially, so any disruption pushes millions of Americans towards food insecurity, bankruptcy, etc. 

Add to that the fact that we still, nationally speaking, have our heads up our communal asses in our resistance to create a universal health care program, which would provide basic health care to all Americans while also eliminating the really grotesque fact that each year far too many Americans find themselves claiming bankruptcy for medical bills, and it is clear that we choose to tolerate the causes of our soaring national debt by not addressing them.

One of the truly paradoxical features of the rise of Trumpism is that it is a populist movement. The very problems that I detail above resulted in millions of middle class, working people to reject Hillary who was effectively linked to the elite, a group who have been so effective in diverting resources upwards to the higher income brackets. The angst was real and Trump took advantage of it while the Dems ignored it, and/or were ineffective when they were in power to stop it.

Take the recent proposal to cap credit card debt at 10%. That is something that the left has been pushing for years, hence Elizabeth Warren's enthusiastic endorsement of the proposal. Of course, the powers in charge, the large financial institutions and the legislators that they own, have pushed back, claiming with straight faces that such a low rate would result in some people not having access to credit.

While this may be true, it is also true that the 25, 28 even 30% interest rates that are being charged to consumers with low credit scores or limited credit history, would make the loan sharks of the past quiver in ecstasy, and perhaps jealousy, that such usury rates are legal.

The simple fact is that interest rates that high only create debt that makes it very difficult to be free from. 

But again, we all must look in our collective mirrors and take some blame for this as well. Not being able to afford something should be a reason not to buy it. But since we all must have what we want, now, there are plenty of unsavory financial institutions that will loan us the money, turning a $2000 purchase into a $4000 payment over time.

Which circles us back to the fact that too many Americans live on the edge, financially, because we allow the rich to drive the narrative about all things income related.

Higher minimum wages? Can't have that, it would cause inflation, so they say, even though CEO pay has skyrocketed in the last 30 years, as has the pay for athletes, Wall street executives, movie stars, hedge fund managers, health insurance brokers and executives, the list goes on and on. 

But never retail workers, bus drivers, day care workers, sanitation workers, even police and firemen. Real income for the people who do the real work in our country has not kept pace so we feel it necessary to charge our way to comfort, a situation which big banks are all too eager to take advantage of.

But I digress.

The deficit will eventually lead to a financial reckoning. We can't continue to spend a trillion, even 2 trillion dollars a year more than we collect in revenue and taxes. It is unsustainable as any family who has faced unending escalation of their debt knows.

The rich must pay higher taxes, the working poor must receive livable wages, the middle class must prioritize where they spend their resources while avoiding the pitfalls of wanting everything new. Remember, supply and demand has two portions, so, while Trump's call for austerity by buying less pencils (who buys pencils?) seems to put all the blame on the working classes, he is right that we can be more discerning, more aware of wants as opposed to needs.

I called this post Our Shared Deficit because there are some Americans who choose to blame our elected officials or the Washington bureaucracies or, of course, immigrants. 

And that is the main problem. We, the people, are the problem and the fact that we can't or won't acknowledge that is what will doom our country more than anything else.  

  

   

 

 

 

Recent Deficit Discussions

First, I feel like I am flattering the participants when I refer to the deficit discussions as "discussions". My American Heritage dictionary defines discussion as an earnest conversation. While no one really knows what goes on behind closed doors, especially closed doors with politicians behind them, what information we do have seems to indicate that while there may have been conversation, it did not appear to be earnest. While it is clear to me that the republican representatives were only interested in talking, not negotiating, I have also heard it said that President Obama offered to double down on the original $2 trillion dollar spending cut plan because he knew that the tax hikes he was proposing would never be agreed to by the republicans, especially the tea party republicans. In other words, he called their bluff.

What a sad state of affairs when the leaders of our country can not work together to solve our nation's problems.

I guess that cat and deer I saw working together to cross the street last week are an example not able to be matched by our elected officials.

The latest "he said what?" that I heard came from House Speaker Boehner. He said that the need to raise the debt ceiling is President Obama's doing, so he is willing to allow the debt ceiling to rise as long as his caucus has an out that they can use to save face with their constituents. It is sad that the speaker and his caucus are in this predicament as they know very well that any budget, including the one they passed earlier this year, will require an increase in the debt ceiling. To make matters worse, the extreme faction of this group wants to adopt an amendment to the constitution that would require a balanced federal budget. Really?! Considering that the military budget was just passed with an increase over last year by those very same people, it is truly amazing that their constituents don't see through their bluster about balancing the budget. As a friend recently told me, the level of economic misinformation among our citizenry is disappointing.

But getting back to the speaker's claim that the debt ceiling is the president's problem. Hmm, let me see. The debt ceiling was raised virtually every year with overwhelming republican support during the Bush years. Since 1980, the deficit itself doubled under Reagan, increased dramatically under Bush I, increased somewhat under Clinton, doubled again under Bush II and is now at a record pace under Obama. If we check who controlled congress during that same time, we find that the house of representatives was controlled by democrats more than half the time, especially during the early 1980's. But since then, it was a republican controlled house during most of Clinton's presidency and for the first 6 years of the Bush II administration.

So, it appears that the facts dispute Boehner's claim. Clearly, the current debt problem of this country is the problem of both parties. It took them both to create this debt, and it should take both to address it. Too bad that both House Speaker Boehner and Senate Minority Whip McConnell would rather pretend that they have not been part of the problem and allow the president to raise the debt ceiling on his own. They are clearly more concerned with playing politics than solving our problems.

It will be even more interesting how they approach the deficit and debt should we have a republican president in 2012. Perhaps those discussions will take place with adults in the room who are earnest as opposed to children who take their ball home when they don't get their way.

Final thought (for now) on the budget and the military

With (finally) the onset of nicer weather, I have been hearing birds in the morning during my route. Chirp, chirp.

In a previous blog, I detailed that federal spending is divided into two main categories, mandatory (required spending per existing laws) and discretionary spending (where we choose to spend our funds). So, when I recently read an article that stated that discretionary spending for the 2011 federal budget was overwhelmingly being directed to the department of defense (something like 75%), I thought it necessary to investigate.

Towards that end, I found a very informative interactive graphic in a New York Times article. Cut and paste link below.

http://www.nytimes.com/interactive/2010/02/01/us/budget.html

This graphic displays the 2011 federal budget by spending via blocks that are sized based on the amount allocated for each area. It is also color coded in that it indicates the percentage of increase or decrease for the 2011 budget over the 2010 budget. It is interactive in that you can place your cursor on each box to reveal the name of the category. And, at the top, there is a box that enables you to hide the mandatory spending categories to display only the areas of discretionary spending. It is very revealing!

First, if you look at it with all spending boxes "on", it is easy to see where the bulk of the federal budget is targeted; national defense, social security, medicare and an area called income security. Clicking on the "remove mandatory spending" button, presents the discretionary spending and confirms in stark contrast the high percentage of military spending that the article claims. The shear size of the box when compared to spending in all other areas would be comical if not for the fact that it reveals just how costly is our belief in might makes right. I encourage everyone to take a look at this graphic and decide for yourself if it reflects your priorities.

In conjunction with this discussion on the military, I recently began reading a book called "9/11/11: The Tenth Anniversary Attack" by Dr. Rocco Martino. It is a work of fiction but is executed by a writer who clearly knows his subject. In the book, Dr. Martino attempts to detail the strategies of our terrorist enemies, and our own government as we attempt to thwart their plans to inflict damage on our country. The plot takes the reader through the time of late 2010 up until the 10th anniversary of 9/11 and paints a possible picture of the destruction that may be heading our way.

Without revealing too many details about the book, there is one particular scene which spurred an unsettling thought on my part. The scene involves a conversation between two of the main characters in which they are discussing as fact how President Reagan toppled the Soviet empire by outspending them. I am not saying I disagree with the assertion that this was the sole cause of the fall of the Soviets as I think it is a bit simplistic, but I certainly agree that it was a factor. (It certainly led to the doubling of our national debt which so many conservatives today seem to overlook in their idolatry of Reagan's legacy).

What unsettled me was that perhaps our enemies are using the same philosophy against us, i.e trying to bankrupt us in our execution of the "war on terror". Again, the obvious fact that we have spent huge sums of money on the wars since 9/11 (not to mention lives) and that, again, this expenditure has as much to do with our growing national debt as anything, seems lost on the deficit hawks now in the spotlight. Perhaps our enemies' plan is to let us spend ourselves into bankruptcy by merely adding fuel to our "revengeful" fire via the occasional plot (foiled or successful, it doesn't matter). Now, as I review the budget boxes as demonstrated on the NY times graphic, it makes me even more concerned that perhaps my fear is not so outlandish.

At a time when federal, state and local budgets are under stress to decrease funding for the people of this country via education, health and human services, there seems no end to the money we will spend on the military. What better way to destroy a country than to let it collapse upon itself.

For readers interested in Dr. Martino's book, please refer to the following websites for information.

http://www.roccoelonardmartino.com (Dr. Martino's website)

http://www.9-11-11thenovel.com (the book site)

Or, for all you electronic book users, it is available on both Amazon (in digital and electronic form) and Barnes and Noble (in electronic form).

More on the Budget

As the sunrise is coming earlier now, I am starting to see glimpses of it as I finish my weekday route. The last few days I was witness to a slight dawning of the light over a scenic view of Lenape park as I drove down Oak Street in preparation of making a left towards the library. Unfortunately, I will only be privy to this until Saturday as Daylight Savings Time begins Sunday morning and I will be thrust back into the dark for my weekday route for another few months.

I have spent some time reviewing various breakdowns (with accompanying opinions) of the proposed 2011 federal budget. The numbers are staggering but in a nutshell, there is about $2.5 trillion dollars expected in revenue with $3.8 trillion estimated for expenses. Quite a discrepancy!!

From what I can gather, slightly more than half of the revenue comes from income taxes, individual and corporate. Just under half comes from social security and other payroll taxes and the slight remainder (about $200 billion, or approx, 8%) comes from a small group of other sources.

Output is divided into discretionary (about 37%) and mandatory spending (the remaining 63%). In raw numbers, mandatory spending is $2.4 trillion. This means that we could have a budget surplus of about $100 billion if we only spent the money we had to and nothing else.

Unfortunately, the categories on the discretionary side of the ledger include the departments of Agriculture, Commerce, Education, Energy, Justice, State, Transportation, Treasury and Veterans Affairs, just to name a few. And, of course, the Department of Defense.

Clearly, the mandatory spending side of the issue needs to be addressed, and that includes Social Security, Medicare and Medicaid which account for $1.5 trillion. Until we see our elected representatives begin discussing these programs, all this "serious" talk about cutting funding for items like Planned Parenthood or the Corporation of Public Broadcasting is purely political bombast.

Think of it this way. Examination of your personal monthly budget reveals that after you pay your $1000 mortgage and $200 in utility bills, you have $60 left to eat and clothe yourself and family.

Serious problems need serious discussions. Too bad we aren't getting any, and shame on us for not demanding them.

Its about revenue, stupid

Last weekend I was treated to a pretty pink and purple sunrise.

This past week, Monday I think, there was a moon rise very early in the AM. The moon was just a sliver and during the 15 minutes when it was low on the horizon, it was perched in the sky nearby a large point of light, probably a planet. The juxtaposition of the two was like something you would see on a SciFi movie about a far away world.

I have heard many a deficit hawk claim that our current budget deficit woes are about spending, spending, spending. Rep Ryan has emerged as one of the leading voices in this area and he has been quoted more than once as saying something to the effect that tax revenues are fine, it is the "out-of-control" spending that has created the fiscal mess we are in.

Perhaps.

I googled federal tax receipts and found that tax receipts for fiscal year 2009 (many Obama blamers forget that the federal budget runs from September through August so the 2009 budget was President Bush's last) were about the same as those for 2005. Clearly, the recession was in full bloom causing a backslide of tax receipts which was not matched by a similar reduction in spending. In retrospect, it is easy to see how devastating such a reduction would be and realize that very little could have been done to prevent it. (The 2009 deficit was $1.4 tillion by the way). 

What President Bush started - a federal plan to bolster the economy via the TARP program, various bailouts for the automakers and Wall Street - President Obama continued via more bailouts for troubled industries and the stimulus program. As a result, the 2010 federal budget, still saddled with 2005 level receipts, saw an increase in spending over 2009 to create another $1.5 trillion deficit for the year.

UGH.

Clearly, we need to work towards bringing receipts and spending more in line. But to ignore the fact that tax receipts were reduced $400 billion from 2008 to 2009 (almost 20% less) ignores half of the budget deficit issue. Also, and it is certainly debatable, there are many economists who would say that the bailouts and additional spending that occurred in 2009 and 2010 prevented an even more severe recession. Again, it is hard to know what would have happened, but it is certainly conceivable that the current state of recovery would not be as far along as it is without the increased spending.

I have heard it said that President Reagan won the cold war by outspending the Soviet Union. A look at the federal budget numbers for his eight years in office reveal that there was a strain on our federal budget as well resulting in yearly federal budget deficits as well as a doubling of our national debt. If we assume it was money well spent then, why aren't we as willing to assume the current deficit spending is also worth while if it avoided a deeper recession?

Sometime soon, taxes will rise. History is clear; President Reagan's deficit spending spree resulted in higher taxes during his 2nd term and during that of the first President Bush. Rather than starting now, Congress and President Obama recently chose to extend the Bush era tax cuts, thereby increasing the deficit even more. Again, the idea is to get more money into the hands of the populace but the fact is, the debt will increase.

Lets reduce spending. But lets recognize that a deficit is the normal result of a recession. And lets also remember that how we reduce federal spending will reveal our priorities. We applaud the deficit spending which contributed to the decline of the Soviet nation. Will we be as eager to continue deficit spending if it helps fellow Americans stay in their homes, secure access to medical services, obtain medical coverage, afford higher education and place food on their tables?

More on the budget

I have been hearing a lot about how overpaid federal workers are when compared to their private sector counterparts so I thought I would google "federal salaries" to see if I could garner some type of breakdown of workers and their salaries. Found that, as usual, the returned discussion of federal employee salaries leaned heavily one way (overpaid) or the other (underpaid) depending on its source. Analysis from groups like the Cato Institute claimed federal workers are making 50% more when including benefits and compensation, while analysis from sources more friendly to workers in general, and govt workers in particular, claimed a negligible difference.

Facts that seem undeniable

- The federal work force is a bit over 2 million strong. That number is about the same as it was when Ronald Reagan was president. In fact, from what I could gather about actual federal workers, only President Clinton reduced the federal work force. Conversely, President Bush II, dramatically increased the federal work force after 9/11, most specifically in the creation of the new Homeland Security department which includes the actual personnel of that department as well as a huge number of civilian contractors. So, there are less federal workers per citizen today than there was 30 years ago.

- The federal work force is composed of a higher percentage of white collar positions held by higher educated staff. It appears that thousands of blue collar jobs have been privatized in the past decade leaving the work force overbalanced with what would normally constitute higher grade, higher pay employees. One could still argue that these individuals may be overpaid, but it might be fairer to compare them to similarly populated industries as opposed to the general work force in its entirety.

- There are about 100 million employees in the public sector. The loss of manufacturing jobs in the past 20 years along with the growth of the service industry means that there is a higher percentage of blue collar (which usually equates to lower compensation packages) jobs than before and a much higher percentage when compared to the federal work force as noted above.

- In general, it appears that high-skilled workers in government are slightly underpaid, lower-skilled workers are slightly overpaid relative to the private sector.

- Benefits accorded federal workers are clearly superior to those in the private sector, less so if you compare them to private sector employees earning $80000 a year or more, but clearly better than the average private industry worker many of whom have no benefits whatsoever.

- Federal workers at the top of the wage scale make less than their private-sector counterparts, while the reverse is true for those with entry-level jobs. An easy example would be the president himself and his cabinet when compared to the CEO and other top executives at any large corporation.

What seems lacking in almost every discussion and article I read is an understanding of why public sector pay has stagnated over the last 30 years. So many people seem eager to blame the overpaid federal workers but no one seems interested in examining why private industry has done little to improve the compensation of its employees yet at the same time, has lavished huge salaries, bonuses and golden parachutes on those at the top. Hmmm.

Another interesting tidbit I found was that congressional staff pay has increased faster than inflation in the recent past. In other words, the very same people who want to eliminate federal workers and reduce their pay have been very generous with our tax dollars to those that work for them.

All in all, it appears that the savings which will be netted from freezing federal workers pay will be about $1 billion a year. In the face of a $1 trillion deficit, we need to find 999 more of these type of savings. Again, we are playing around at the edges here.

Finally, why is it the federal workers, state workers and lately union workers that are being targeted by (mostly) Republican congressman, senators and governors. Freezing their wages, eliminating their jobs, questioning their work ethic is OK, but when someone asks for a few percentage points in extra taxes from the super rich or (gasp), a salary cap on compensation at the top of the wage scale, then that is called socialism.

To me, the average worker in this country should be outraged that fellow middle class workers are being blamed for the deficit. If these savings actually net that $1 billion amount, that means these overpaid workers account for 1/10 of 1% of the budget deficit yet that is the focus of all the talk. Why aren't we talking about the other 99.9% of the problem???

Deficit Components

While it may have occurred since I started delivering papers in the early morning, this past weekend featured a setting moon along with a rising sun. In addition, the moon was full so the combination was quite remarkable. It was especially striking when traveling on the back streets where there are fields on either side of the roadway. The moon, stark white and full beginning its descent on one side while the rising sun produced pastel pinks and oranges on the other side.

A while back I saw a comedian, Dennis Miller I think, mention the national debt during his routine. He said what I believe reflects many people's thoughts, that the number is so big it is hard to get your head around it. I thought of that remark earlier today, and, in conjunction with all the doomsday rhetoric concerning the debt, I thought I would google "national debt" to see if I could get some data as to whom we owe this money. Do we owe the Japanese? Chinese? Australians?

Wikipedia detailed the debt in the following manner.

The national debt is broken down into two main categories:

1.Securities held by the public

Marketable securities
Non-marketable securities

2.Securities held by government accounts

It pegs the breakdown of these 2 categories as 60-40 where the 60% portion is held by the public. I think this means that 40% of the debt is held by one US government agency against another. For instance, the chart I saw showed that over $2 trillion was held by the Social Security Administration which I assume represents the amount of money that has been paid into Social Security by people over the years but not yet collected by retirees. Other agencies are listed as well. In effect, it sounds like we owe ourselves about 40% of the national debt. Which I guess also means that when we pay interest on this debt, we are paying ourselves as well. Interesting.

That leaves 60% owned by the public. Again, are they citizens of the United States, corporations, foreign governments?

Again, data was hard to decipher but it appears that about half of the "public" debt (which again is 60% of the total) was held by non-US citizens and institutions. Of this amount, about 66% was held by the central banks of these countries, in particular the central banks of Japan and China.

So, what does it all mean? I think it mainly means that the federal deficit is not a debt owed to people who are looking to bankrupt this country. I often hear some alarmists talk about the day when our debtors will "call our loans". As we live in a time of a global economy where all monies are tied together, I can not imagine the banks of the world deciding to foreclose on America as it would bring everyone down together. This seems true in light of the concern of countries like Greece and Ireland failing and all the effort extended to keep them afloat. Now times that by 1000 in regards to the United States.

But it also means that we cannot continue to forestall serious discussions about the debt. The problem is, you can't discuss something serious if you don't understand the problem, and if my experience today in trying to detail the minutia of the debt is typical, there are very few people who understand this topic. Unfortunately, there are many who are using the national debt for political gain regardless of whether they understand it, and in fact seem only interested in adding to the confusion about its true meaning as opposed to educating the people as to what it will take to reverse the process.

So, when you hear someone discussing the debt, listen for facts as opposed to opinions. You might find a dearth of one but a plethora of the latter yet it is the latter that seems to be driving the discussions.