US Deep In Debt And Still Digging
Jim Jubak
You're paying for the nation's debt addiction through both direct and indirect taxes. And unfortunately, Uncle Sam is going to need more money.
A not-so-subtle reminder that nothing in life is certain but debt and taxes:
The taxes you paid on your recently filed 1040 included roughly $4,300 to cover your household's annual share of the interest payments on the $9.4 trillion in public debt owed by the U.S. government.
That $9.4 trillion is just part of what we as a nation owe collectively. There's also the $700 billion trade deficit we ran up in 2007 as a result of importing more than we exported.
And then there's what we owe individually. Like the $950 billion in credit card debt we owed as of the end of March. And the $1.6 trillion in auto loans and other nonrevolving debt.
Face it: We live in a debt-addicted culture.
One day, the bill for all that debt will come due. That's a dead certainty. As sure as it is that the interest due on the federal debt will show up in the income tax you pay next year. And the year after.
We'll pay some of that bill directly, as formal taxes. And we'll pay some of it indirectly -- maybe even so gradually we won't notice -- as what I'd call informal taxes, such as lower living standards and a sinking U.S. dollar. But pay it we will. (Unless we somehow boost our productivity so that we get rich fast enough to pay off our debt out of our "extra" wealth. That's the only alternative I can see that will break the connection between debt and taxes.)
I'm going to spend today's column depressing the hell out of you, I hope, by describing how deep a hole we've dug for ourselves. I'll spend my next column explaining how we could be -- but so far aren't -- using investment in infrastructure to get out of this pickle.
A hard habit to break
You'd think the collapse of the housing bubble would have taught Americans to use less debt. People are, after all, losing their homes when they can't pay their monthly mortgages.
Well, you thought wrong.
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