Every American family owes $152,000 to pay off the national debt, according to Rep. [crscore]Tom McClintock[/crscore], a member of the House Budget Committee and chief sponsor of the Default Prevention Act.
McClinton presented his $152,000 calculation last week when he was invited to testify before the House Financial Services Committee about possible U.S. government defaults.
In 2011, Standard & Poor’s downgraded U.S. credit-worthiness for the first time, saying Washington had not done enough to reverse years of deficit spending. But President Barack Obama’s administration continues to exceed the previous year’s debt ceiling.
The U.S. government so far has amassed $19 trillion in national debt, and in 2016 it will spend over a half billion dollars more than it received. All the while, Washington’s annual interest payments alone amount to $255 billion.
The Daily Caller News Foundation followed up with the congressman to translate what thees billions and trillions of dollars mean for an ordinary family.
“Numbers of this magnitude have no reference point in the real word,” McClintock told TheDCNF.
“Once you start to think of these numbers in family size numbers, it gives you a much better perspective of the magnitude of the irresponsibility in Washington,” he said.
“Every trillion dollars that we go deeper in debt is $8,000 of additional debt per family,” he explained. “And that is not a theoretical number. That is debt you owe just as surely as if it appeared on your credit card statement this month.”
The $19 trillion in debt translates to a $152,000 bill for the average family — and the national debt continues to increase.
The Congressional Budget Office (CBO) estimates that federal spending in 2016 will cause the debt to increase by another $544 billion. This means everyday the government spends $1.5 billion more than it takes in revenue.
McClintock explains that the total spending figure is as if “$4,000 was just had added to your credit card this year.”
The federal government is lucky that current interest rates are at historic lows — the official federal interest rate is 1.7 percent, according to the CBO. This translates to $250 billion in interest payments, which McClintock says costs each family $2,000.
“That means that $2,000 of the taxes that you paid to the IRS this year accomplished nothing more than renting the money we’ve already spent,” he told TheDCNF.
The interest payments are nearly the equivalent of the $286 billion spent on the government’s Medicaid program. Interest rates, however, are expected to rise and U.S. interest payments will rise with them.
Currently, a 10-year Treasury note pays out 2.2 percent interest. After 2019, the interest for 10-year T-bills is expected to rise to 4.1 percent, according to the Committee for a Responsible Federal Budget. This means each family might see their own debt share double merely to finance the national debt.
McClintock claims the $19 trillion in total debt is 104 percent of the nation’s Gross Domestic Product (GDP).
The total “does not include unfunded liabilities such as pension or state a local debt,” he told TheDCNF. “That is just the federal national debt held by the public and intergovernmental debt. It is 104 percent of GDP.”
McClintock said that “if you compare a family income to GDP, then we’d be a family that owes more than it makes in a year, about 104 percent. That makes the United States “about eight or nine years behind Greece.”
The federal government additionally borrows from people and sovereign governments like China, but also borrows from itself.
Last year, the government borrowed $5.3 trillion from its own trust funds — like the Social Security Trust Fund — to pay for regular spending programs, in a type of debt called “intergovernmental debt.”
The intergovernmental debt “is like if you’re borrowing from your kid’s college fund to pay your bills,” he said.
McClintock then added, “We hit the wall when there is serious doubt by credit markets that their loans to the federal government are safe.”
“Countries that bankrupt themselves don’t hang around very long,” McClintock soberly added.
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