Danger: Debt & Deficits

Adrian Powell FIC
District Agent
Modern Woodmen of America

Posted 06-04-09

We are not out of the woods yet. The stock market has begun to make tentative steps towards the appearance of the end of the bear market; Chrysler and General Motors are taking steps towards becoming a leaner and hopefully more prosperous companies and credit markets are starting to make tentative steps to become more open in their lending policies.

But while this is seemingly good news, the problem is that with TARP, TRAP, GM, Chrysler, the war, Social Security reform and everything else required in the federal budget, spending is getting out of control.

The Federal Government is going to have a 1.7 Trillion dollar deficit this year due to the expenditures exceeding income.

Our National Debt is now projected to be nearly 11 Trillion dollars.

Most people have little idea of the difference between a Billion and a Trillion dollars. All most people know is that it sounds like a lot of money, but nothing that can’t be dealt with.

When I first started college, we worked some problems using “scientific notation”, which is a way to show numbers when they get too big for a calculator. So 1.7 trillion dollars is $1,700,000,000,000, or 1.7 x 10¹². That is, one point seven times ten to the twelfth power.

To understand a little better, try this; to repay one Million dollars you would need to pay one dollar per second for the next 12 days.

To repay one Billion dollars, it takes one dollar per second for the next 31 years.

For one Trillion dollars it takes one dollar per second for the next 31,000 years.

The government will need to control the growth of the debt and deficit within the next three years or we will all be responsible for the collapse of our system as we now know it.