Skip to main content

How The US Debt Burden Affects You And How You Can Help: Address To Everyday Americans


The United States' total federal government debt is approximately $36.22 trillion as of February 28, 2025 according to the US Senate's Join Economic Committee.

To put this into perspective, the U.S. debt-to-GDP ratio for Q3 2024 was 120.73% according to Investopedia.

Before you can really appreciate how all these concern you, let’s explain the debt-to-GDP thing in simple English…

Understanding Debt-to-GDP Ratio In Simple English

Imagine you have a lemonade stand, and you borrow $100 from your friend to buy more lemons and sugar.

The debt is the $100 you owe your friend.

Now, let's say your lemonade stand makes $200 in a week. The GDP (Gross Domestic Product) is like the total amount of lemonade you sell, which is $200.

Debt-to-GDP ratio = Debt ($100) ÷ GDP ($200) = 0.5 or 50%

This means that for every dollar your lemonade stand makes, you owe $0.5 (or 50 cents) to your friend.

So, you owe half of what you earn.

Assuming you borrowed $200 but your lemonade stand earns $150...

Debt-to-GDP ratio = Debt ($200) ÷ GDP ($150) = 1.33 or 133%

In this case, for every dollar you earn, you owe $1.33. Here, you owe more than you earn which indicates profound financial ill-health.

In the same way, a country's debt-to-GDP ratio shows how much debt it has compared to how much money it makes. A high ratio means a country owes a lot compared to its income.

Applying this to the current US national debt burden, a debt-to-GDP ratio of 120.73% (approximately 121%) means that, for every dollar the country earns, it owes $1.21 (that is, using the Q3 2024 figures - the latest we can find).

Why Should This Concern You As An Everyday American?

The United States' massive debt of over $36 trillion can seem like a distant problem, but its impact is felt by everyday Americans. Here's how:

  • Look At The Country Like A Business: Any business can scarcely survive by owing $1.21 for every dollar made. So it is for the country.

  • Higher Taxes: As the government tries to pay off its debt, it may increase taxes, leaving you with less money in your pocket.

  • Inflation: Excessive debt can lead to inflation, making the things you buy, like food and housing, more expensive.

  • Reduced Government Services: A heavy debt burden might force the government to cut back on essential services, such as education, healthcare, and infrastructure.

So, What Can You Do To Help?

  • Stay Informed And Engage Your Reps: Educate yourself on the US debt and its implications. Then, based on what you know, encourage your representatives to make fiscally responsible decisions.

  • Support Balanced Budgets: Advocate for policies that promote balanced budgets and reduced spending.

  • Make Smart Financial Choices: Take control of your personal finances by saving, investing wisely, and avoiding unnecessary debt.

SEE ALSO: How To Earn By Learning In-demand AI Skills More Easily (A Counterintuitive Approach)

Finally, every small action counts, and collective efforts can lead to significant positive change. By working together, we can help alleviate the US debt burden and build a more stable financial future.

Labels:

Comments

Post a Comment

Let's share. Contribute your thoughts to this discussion below...

Popular posts from this blog

How To Handle Your Haters: A Lesson From Bill Gates And His Daughter (2)

Bill and Phoebe Gates. Image credit: Business Insider Do you know what? I learned that, growing up, Bill Gates was too small for his age and was often bullied at school and on the streets. As a result, he had very few friends - no more than two per time. As related in the archives , young Bill was a recluse who spent hours cocooned in his room. Once, during such a social withdrawal, his mom asked after him over the intercom, and Bill shouted back, “ I'm thinking… Have you ever tried thinking? ” The fact is: Young Bill Gates didn't have many friends. Unknown to him, many of his peers snubbed him because a rumor spread around town that “ Bill is the weirdest guy that God ever made ”. As acknowledged by Washington Post's Mark Leibovich, the real issue was that the boy Bill Gates III was an infant prodigy. As a result, he just couldn't get along with most of his peers and vice versa. But, it hardly became an issue to him because his attention was essentially somewhere else....
Post a Comment
Read more

AKPABIO AND AKPOTI: Natasha’s Major Mistake, And How Women Should Approach Sexual Exploitation From Childhood

Senators Akpabio and Akpoti. Image credit: The Cable Sexual abuse - of both adults and children - seems to be much in the front burner right now. For me, the most serious of them is the recent report by the United Nations that one-year-olds are among many kids falling victim of rape in war-torn Sudan. Meanwhile, it triggered us to start a campaign to better strengthen justice systems against child sexual abuse as you'll see when you click through . Another current case showing that sexual abuse topics seem to be dominating the news is in another African country: Nigeria. It concerns the Senate President of Nigeria Godswill Akpabio and a female senator named Natasha Akpoti. Here's a little of the story to help you in understanding my point in this article. The Story According to BBC , In an interview with Arise Television on Friday, Senator Uduaghan alleged that Akpabio had made inappropriate advances towards her during a visit to his residence in southern Akwa Ibom...
Post a Comment
Read more

The Number 1 Secret For Raising A Kid Who Will Be Healthy, Wealthy, And Wise: A Lesson From Jeff Bezos’ Upbringing

This secret is for all parents, guardians, and teachers who are serious about raising kids who will be successful in life and early enough too . So, if this sounds like you, just invest your time and attention for 10 minutes only and get one point that will make a lot of difference in the future of your family. Knowledge Is The Secret, But Maybe, Not What You Think Image credit: European CEO Pictured above is Peter Drucker (1909 - 2005). Drucker was a renowned management consultant and author who is often credited with coining the term " knowledge economy ." He first discussed the concept in his 1969 book, The Age of Discontinuity: Guidelines to Our Changing Society . In the book, Drucker argued that the economy was shifting from a focus on manual labor and industrial production to one centered on knowledge, information, and expertise.  In his 2005 book  Thinking For A Living , Thomas H. Davenport revealed that Drucker already used the phrase " knowledge work...
Post a Comment
Read more