March 26, 2012

What If the National Debt Were Your Debt?

Antony Davies

Senior Affiliated Scholar
Summary

If you spent the way the government does, you might be contemplating bankruptcy.

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In 2011, the federal government brought in $2.2 trillion in revenue, spent $3.8 trillion, and carried $14.6 trillion in debt. 

  • For a family with $50,000 in household income, this would be comparable to spending all their income, and then buying a $38k SUV with their credit card.
  • The same family would also have bought a $30k SUV on their credit card in both 2010 and 2009.
  • They would also have had $222k on the card from 2008 and sooner.

That makes a total of $320k on the credit card.  At the government’s interest rate (3%), they would be paying $10k a year in interest alone.

Watch Mercatus scholar Antony Davies discuss in this Learn Liberty video: