We now finally have the answer to the age-old question of what happens when an economist and a rocket scientist step into a bar.
Tag: U.S. Debt
How Does the Debt Stack Up?
According to some estimates, the present value of the cost of Social Security and Medicare’s unfunded promises now stands at more than $175 trillion. Add $36 trillion more in federal debt ($26 trillion held by the public) and the total is well over $200 trillion. Even with historical economic growth and productivity increases, there is no way that these obligations can ever be met out of real resources so long as they continue to increase. What’s worse is that the nation cannot count on growth and productivity maintaining historical trends, as growing debt service and entitlement payments increasingly crowd out private capital investment. This ever larger burden on the private economy threatens the entire free market system.
So that citizens can get a handle on just how large a trillion is, the Wall Street Journal published three Letters to the Editor this week providing illustrations of a trillion dollars. Hugh F. Wynn’s letter can be viewed here (The Painful Parade of Zeros, Letters, April 7), and William F. Meurs’ letter can be viewed here (A Quiz Question on the Debt, Letters, April 8). The third letter is from me, which the Journal published today (print edition). The published version, edited by the Journal for space, can be viewed here (How Does the Debt Stack Up?, Letters, April 11).
Below is my original, unedited submission.
William F. Meurs’ hypothetical of a person spending a trillion dollars a day for 2740 years to illustrate how enormous a trillion dollars is (A Quiz Question on the Debt, Letters, April 8) improves on Hugh F. Wynn’s string of zeros (The Painful Parade of Zeros, Letters, April 7), but still falls short of most people’s real world experience. How many of us have ever spent a million dollars in a day? Nearly everyone, however, has walked a mile. A better question therefore is how high would a stack of a trillion dollar bills (new and crisp, not rumpled) reach? The answer is 67860 miles, more than a quarter of the way to the moon. Of course, were it hundred dollar bills, the stack would be merely 679 miles, just one long day’s drive.
Memo to American Youth from the Treasury Secretary (Parody)
United States Treasury
July 4, 2021
Memo to: American Youth
From: Janet Yellen, United States Secretary of the Treasury
Subject: Facts of Life
Each of you is now old enough to appreciate certain facts of life. Therefore, in the interest of transparency, I am writing on this 4th of July to inform you of debt obligations you will face upon reaching maturity at the age of eighteen. In particular, at eighteen, each of you will receive an invoice from me or my successors for lifetime repayment in the approximate amount of $400,000. This amount represents the share of U.S. Government debt that is being assessed to everyone presently under the age of eighteen. The amount likely will be larger for the younger of you. Please note that this figure reflects the fact that your grandparents and parents have decided, through their elected representatives, not to receive invoices of their own. Consequently, the entirety of the debt obligation shall fall on your generation, which currently comprises 22% of the U.S. population.
Please also be informed that when you begin your productive years, all of the fruits of your productivity shall belong to the U.S. Treasury. Be assured, however, that I or my successors will always permit you to retain a varying percentage of your income for your personal use. Moreover, for the least productive of you, we will provide free of charge a number of benefits and services that we have determined are good for you.
We have also determined that, to control the Treasury’s debt service costs, it will be necessary that the purchasing power of the income you are permitted to retain, as well as any savings you might accumulate, decline year over year throughout your life. Therefore, you can expect to see your standard of living stagnate or possibly even fall as you grow older.
Finally, as U.S. Treasury Secretary, I speak only to your federal obligations. You should be aware that you are also likely to receive similar notices from the state and local governments in whose jurisdictions you reside.
In closing, let me take this opportunity to wish you the brightest of futures as you approach adulthood in America.
J.Y.
Liberty & Markets 