For today’s guest blog post I contacted Mike Hewitt from DollarDaze.org. He sent me an interesting article breaking down the enormity of the US Federal Debt. Enjoy this post. For more daily financial commentary from Mike be sure to visit DollarDaze.org
At the time of writing this article, the current US Federal Debt stands at $10.7 trillion. The sheer magnitude of that number is difficult to comprehend.
In order to illustrate just how large that number is, consider the following...
The size of a dollar bill is 6.6294 cm wide, by 15.5956 cm long, and 0.010922 cm in thickness. It would take approximately 96,721,648 dollar bills to make up one square kilometre.
The volume taken up by these dollar bills would be 12,068,253 cubic meters. This would fill over 90% of the largest building in the world, the Boeing Plant in Everett, Washington designed to assemble Boeing 747 planes.
If we were to cover an area with enough dollar bills equal to the current US debt it would have an area of 110,493 square kilometres which would nearly cover the entire state of Virginia!
When stacked, the number of dollar bills required to represent the US debt would be 1,167,243 km high. This is about 3 times the distance to the moon!
Laid end to end the dollar bills would measure 1,664,460,767 km which is longer than the distance of Saturn at its furthest point from the Sun. Uranus is 2.974 million kilometers away from the sun (about $19.1 trillion required).
Thought of in this context, we can truly say that the US debt is astronomical!
Mike Hewitt is the editor of DollarDaze.org, a website pertaining to commentary on the instability of the global fiat monetary system and investment strategies on mining companies.
10 thoughts on “How Large is the US Federal Debt?”
The USA is approaching bankruptcy
As hard is it is to believe, the US may have to default on it's debt. Public debt has grown by more than 100% with all the bailouts. We currently have a debt level 3 times what the European Union allows it's members. We are financially in far worse debt as a percent of GDP than Italy. Unfortunately, our Social Security Trust Fund is financed almost entirely by special bonds. Our government loaned themselves the money in the Trust Fund and spent it like drunken sailors at a strip club. We are left holding what may be worthless pieces of paper to guarantee our Social Security checks.
The United States of America is approaching bankruptcy
You commentors really don't know that you don't know much about the subject. The fed creates currency and gets it into circulation buying up, tradisionally, Federal bebt - approximately 380 billion per year. They must also buy up federal dept with new currency to shore up the liquidity of the dollar outside the US. (The US Dollar is used to buy many things, and all oil, outside the direct US economy.) This is probably in the range of 100B per year. Without this, the economy will enter recession. The net benefit to us taxpayers is that a great deal of the federal government can be paid via currency creation rather than direct taxes.
The current deflationary situation requires an even greater infusion of currency to get the economy back on track, though the channels may need to be different. As a result, they are directly infusion money into the economy by buying bad mortgages, etc to the tune of, from what I've read, around 1 trillion dollars. (Conveniently, much of that money will be repaid to the US government, increasing revenues in future years.) It will take some time for this money to have the desired effect but it appears the Fed is already seeing the signs of turn around and reducing the rate of currency creation.
BTW - collateral does not guarantee value or repayment. Collateralized holdings lost their value on a massive scale during the multiple fanancial panics in the 19th century and, like the s&l crisis of the 80s, banks holding mortgages today are failing because the property backing their loans have fallen in value. Even though the loan may be paid off in the long term, banks have to keep a researve based on the value of collateral to loan. When the collateral's (housing) value falls, they need more cash on hand to cover potential losses or go under. Where do they get cash? 1) additional depositors (not likely), 2) investors (not likely) 3) Other banks, ie investors, taking them over (happening) 4) Fed making very low interest loans (happening), or 4) Fed using new currency to buy up deflated mortgages (happenig but difficult since valuing the properties without killing the bank is a problem.)
This really puts the big numbers in terms that demonstrate their sheer size. And I must disagree, debts and deficits do matter, particularly when considered in terms of percentage of GDP, and their accumulating interest. The latter is what's really scary to me, as the cycle spirals out of control. The U.S. went off the gold standard in 1971, when France asked for its dollars to be redeemed for gold and Pres. Nixon realized that we would be losing what he considered to be too big a piece of the national assets. I don't know enough to know about the wisdom of that decision, but do know that if we keep printing dollars without creating actual value, the only reason we won't be carting dollars in wheelbarrows as the Germans are said to have done with marks before WWII is that technology has changed and money is transferred by plastic or computer entry and not physically!
i hope the government does the right thing in balancing all the competing interests and restoring sound fiscal policy, but don't have real confidence. In any case, the mess we are in has been a long time coming, and will take a long time to resolve.
The true debt is not known, the Feds are unwilling to disclose their loans or who they're loaning too. Week ending last week the Feds were loans financial banks $93 billion DAILY and investments banks, $100 billion for the week and comerecial paper purchases were at $282 billion for the week. That's all up from the previous week, and that America,is close to a $1 trillion that the Feds are spending a week. How will they repay these loans, simply by printing US dollars. America is abusing it's position as world currency.
it's all fairly serious stuff. You in the US are not Robinson Crusoe you know. I've bought gold but I can't help feel the gold market is being manipulated. what do you think.
You know, I knew the U.S. was in huge debt, but the picture wasn't this clear until i read the post. Haha! I know it's not suppose to be funny but when things are "looking" this bad, there's nothing you can do but have a laugh out of the situation. Haha!
Not surprising to me really, considering how few of us are ever taught anything about money and finance in our 12 years of public education.
I have no doubt now, however, many of us will have at least an inkling before the next 2 years have passed.
Please think kindly of/to each other. It's possible to get through it, and become "a survivor", and like me, a survivor of the 30's, who's enjoying every day. Doug.
Maybe we don't understand debt. It is not what you owe that is important, it is what is backing it up. Ever heard of collateral? (& I don't mean the movie) Unless you want to trade the debt for Virginia, or Texas, then it may be a problem because the people that we owe the money to may just want to be paid back. So we "sevice the debt" by printing money or giving them gold. I suggest we give them Washington, D.C. and the caretakers therein.
Now if we are not gonna give 'em Texas, we have to give something, and that simply means the more dollars we print with the same backing, (or reserve) each dollar becomes worth less, (not worthless [yet])
When the dollar buys less, (that means, children, it takes more dollars to buy the same thing than it used to take) Ever heard of inflation. Well, if you haven't, you will get a real education soon. (as soon as we are finished with disinflation [or deflation] call it what you will. So it does not matter how big the debt is, it is how we service it. Or how we CAN service it, IF we can. (printing works for while) OK, feel better?
deficits and debt don't matter as long as deficits do not cause high/hyperinflation and debt as long as the majority is owned by US citizens
Hooweee....it is indeed astronomical ..It is indeed splendid to have this post shared and of course takes so much erudition to get this down ...You have said it all...What will shall see happen to the US economy in a Few Years to come will be more trhan the 87 market crash That is inevitable...Traders with the Eagle eye sees this and we all know the it is a crack in the rib for the Equity markets ....Lets see How hard Your newly elected President can at least try to save the economy in may be 20 years to come ..However good luck to us all ..The world at large ... Really dont know why we have to eat the pain of another.. but hey ...what has gone wrong has gone wrong ..I personally wish the US speedy recovery from its ailment and indeed the World at large ....All My love from AFRICA ..RAZAQ DAVIES
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