An inconvenient fact has gotten shoved out of the headlines by Lehman Brothers' demise, AIG's (NYSE:AIG) overnight implosion, the collapse of Washington Mutual (NYSE:WM) and Wachovia (NYSE:WB), and 60% plunges from the likes of National City (NYSE:NCC). As a result of a sickly economy, government bailouts, and an otherwise continued instance to spend more than we make, our national debt is about to surpass the $10 trillion mark.
The numbers are pretty amazing: 10 trillion dollars. Fourteen digits. About $33,000 per American. One quarter of it is owned by foreign investors. Almost 1 trillion has been added in the past year alone, with $300 billion added in just the past month.
Take a look at how fast national debt has grown over the past five years:
|
Year |
National Debt |
Growth |
|---|---|---|
|
2003 |
$6.79 trillion |
9.52% |
|
2004 |
$7.35 trillion |
8.25% |
|
2005 |
$7.93 trillion |
7.89% |
|
2006 |
$8.52 trillion |
7.44% |
|
2007 |
$9.00 trillion |
5.63% |
|
Today |
$9.89 trillion |
9.89% |
Pretty scary stuff, especially in the context of the banking industry's ongoing dilemmas. What we've learned in the past year should resonate loud and clear throughout the national debt market: When you become overextended, bite off more than you can chew, and rely on debt to feed your way of life, bad things usually happen. In a year when every American has become far too familiar with the words "bailout," "leverage," and "bankruptcy," and as "debt" has become the naughtiest four-letter word of them all, few stop to remember that the U.S.A. is the world's largest debtor.
In reality, passing the $10 trillion mark is purely symbolic; in and of itself, it means nothing. Nonetheless, we live in a "boiling frog" economy; No one dares to move a finger until a crisis lies on our doorstep. Will $10 trillion finally be the number that graces enough headlines to wake America up to its looming debt problem? By golly, I sure hope so.
More on the national debt:
