To continue the thread we started in the earlier article, there are certain statistics that we did not cover. Thus we need to collect more information about how much money there is and how much is used and how much is created. Sometimes this is like comparing apples to oranges as data is available from different years. But hopefully the scale of the issues will become clear or clearer based on this information.
Also the information presented deals with the US as a whole, we did not present a state by state debt totals. These are probably very significant given the size of the economies of California, New York, Texas, etc.
The information that was not covered includes the budget of the US. Here is the tax revenue for the federal government for the year 2007.
It is about $2,691,538,000,000 or about $2.7 trillion in 2007 before refunds.
On Feb. 12, 2010, President Obama signed into law an increase to the federal borrowing limit by $1.9 trillion The federal government can now borrow $14.3 trillion. This is evidently what the federal government needs to function for the rest of the year. The House had already approved this several weeks ago.
US Budget
Mandatory spending: $2.184 trillion
Discretionary spending: $1.368 trillion
[http://en.wikipedia.org/wiki/2010_United_States_federal_budget ]
The following article from Bloomberg discusses the nature of public debt in order to finance growth. This has been the success story of America's economy till now. The problem is that
there is too much debt already. In the past when a recession is occuring, the government goes into deficit spending in order to jumpstart the economy. This has worked well in the past. There is concern that the current debt just does not allow for the same type of measures as in the past.
[http://www.bloomberg.com/insight/america-tied-up-by-record-debt.html]
Private Debt
Mortgages
The value of all outstanding residential mortgages, owed by USA households to purchase residences housing at most four families, was US$9.9 trillion as of year-end 2006, and US$10.6 trillion as of midyear 2008. During 2007, lenders had begun foreclosure proceedings on nearly 1.3 million properties, a 79% increase over 2006. This increased to 2.3 million in 2008, an 81% increase vs. 2007, and again to2.8 million in 2009, a 21% increase vs. 2008. This is a little dated, but it only has gotten worse.
Student Loans
There is an estimated $730 billion in outstanding federal and private student-loan debt, says Mark Kantrowitz of FinAid.org, a Web site that tracks financial-aid issues—and only 40% of that debt is actively being repaid. The rest is in default, or in deferment, which means that payments and interest are halted, or in "forbearance," which means payments are halted while interest accrues.
http://online.wsj.com/article/SB10001424052748703389004575033063806327030.html?mod=WSJ_hp_mostpop_read
http://online.wsj.com/article/SB10001424052748703389004575033063806327030.html?mod=WSJ_hp_mostpop_read
Credit Cards
There were 26.5 billion credit card transactions in 2008, totalling $2.1 trillion. That's up from 21 billion transactions totalling $1.4 trillion in 2003. (Source: Nilson Report, December 2009)
At the end of 2008, Americans' credit card debt reached $972.73 billion, up 1.12% from 2007. That number includes both general purpose credit cards and private label credit cards that aren't owned by a bank. (Source: Nilson Report, April 2009)
http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php
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