Those of us who suffer from triskaidekaphobia, the fear of the number "13", have nearly a trillion reasons to be afraid, very afraid in the next few days. During this period, the debt of the United States will exceed $13 trillion dollars for the first time in the nation's history.
"Federal Debt" is the total of all debt instruments issued by the United States and consists of two basic categories. Debt owned by the public are the bills, notes and bonds in the hands of individuals, corporations, banks, state and local governments as well as these obligations held by foreign governments. This publicly held debt amounts to $8.4 trillion or about 65% of all federal debt. The other category includes intergovernmental holdings which are mostly non-marketable securities held by government trust funds, revolving funds, special funds and Federal Financing Bank securities. These obligations amount to about $4.5 trillion, or 35% of all federal debt.
Debt held by the public is growing at an alarming and ultimately unsustainable rate. Two years ago, debt held by the public added up to "only" $5.2 trillion; since then, it has grown by $3.2 trillion, or more than 60%. To put that growth into perspective, every year the federal government spends more than $30,000 per household but takes in something less than $20,000. That means that each household's share of the public debt grew by at least $20,000 in the past 730 days.
Much of this debt is being purchased by America's trading partners but their appetites for more U.S. treasury securities are waning. "We cannot continue to expect nations with lesser living standards to continue to subsidize ours by buying our debt." said Roger Nelson, the Institute's chairman.
And there is more bad news. These figures represent only the notes, bills and bonds the government has issued. They do not include the promises and entitlements the federal government has made to senior citizens, military veterans, federal employees and society's unfortunates. These obligations dwarf the bonded debt. If these obligations were included the federal debt is more than $74 trillion - - - $242,000 per US citizens. Sheila Weinberg, the founder of The Institute observed, "The federal government should report these unfunded promises on its balance sheet. Their effect should be part of every conversation in Washington and on kitchen tables across America. Until they are, we'll continue to delude ourselves into unsustainable public choices."
The only good news may be for those who suffer from triskaidekaphobia. With its debt growing at five billion dollars per day, it will only take about 200 days to reach $14 trillion in total federal debt and Congress has already authorized federal debt of as much as $14.9 trillion.
The Institute for Truth in Accounting was created by distinguished financial and public policy experts concerned with the quality of public and private organizations' financial reporting. It is the mission of the IFTA to encourage private and public entities to produce financial reports that are comprehensive, comprehensible and transparent and to inform the public of the importance of truthful accounting.
IFTA actively seeks association with other public interest groups that recognize the need to improve financial reporting or want to better understand the financial effects of current accounting practices. The Institute is a non-profit, public interest group that does not advocate public policy beyond better, and thereby, more truthful, accounting. For more information about the Institute, visit www.truthinaccounting.org, www.truthin2010.org, www.StateBudgetWatch.org.