Your Real Second Mortgage

We've all heard the ridiculous stories about how, if we took the entire national debt in dollars and stacked them on top of each other they would stretch to the moon and back several times. I've always found this approach to providing context to be dumb. Not only does it not really tell people anything meaningful, anyone clever enough to do this calculation should also understand that: 

  • Money stacked that high would squish and bend - bet that was not factored in.
  • The moon does not stay in one place relative to the earth - where exactly are they measuring to then....the moon's orbit? Seems fishy to me.
  • If we had enough dollars to stack that high, we should use them to actually pay off the debt.

What provides better context is the calculation of debt per capita, which you can find at the U.S. National Debt Clock website. The numbers as I write this (in round engineering terms): 

Total National Debt: $12,000,000,000,000

Total US Population: 300,000,000 people

Debt per Person: $38,800

Now this is money we have already borrowed. You can blame Reagan or LBJ, the Gulf War or Medicare. The numbers are the same, and we owe it.

I want to add to that another number: $2.2 trillion. This is the number that the American Society of Civil Engineers indicated early this year is necessary to spend to catch up on maintaining our deteriorated national infrastructure. Let's run this through the same analysis:

Total National Infrastructure Liability: $2,200,000,000,000

Total US Population: 300,000,000

Infrastructure Liability per Person: $7,300

Again, this is a liability we have that needs to be paid. This isn't going to buy us any new prosperity, great programs or awesome stuff. It just fixes what is broken. And that number is, like the debt, growing each day. Woo-hoo!

If you live in Minnesota like I do, the Department of Transportation recently filled in another number on your debt meter. That number: $50 billion. The money is the difference between what we have ($10 billion) and what we need ($65 billion) to make critical improvements to the state's transportation systems over the next 20 years. 

MN Transportation Improvements Liability: $50,000,000,000

Total MN Population: 5,200,000

MN Transportation Improvements Liability per Person: $9,600

Let's stop here, but understand that we as a society have many, many more obligations than just these. State debt, local government debt, all of the liability for regional infrastructure and local infrastructure maintenance that is not counted here, but will hit even closer to home. Stopping here gives us:

National Debt per Person: $38,800

Infrastructure Liability per Person: $7,300

MN Transportation Improvements Liability per Person: $9,600

Partial-Liabilities per Minnesotan: $55,700

Do you wonder how many times a family of four could stack that amount in dollars to the moon and back? Nope, me either. But roll it into a $222,800 mortgage and pay it off over 30 years and here is what your family owes:

Your (partial) Government Liability Mortgage: $1,196 / month

At the beginning of this month I recommended listening to the Thomas Jefferson Hour podcast on the national debt. Jefferson's advice: avoid debt, but if it is necessary then make sure it is paid off in the generation that accumulates the debt.

So let's do it. Let's take all the debt we have accumulated, roll it into one long-term loan, apportion it out to the US population and have it paid off in thirty years. Then, while we do that, let's actually tax ourselves for the services we demand and the lifestyle that we live. Let's pay for our roads, our street lights, our sewers and our water towers. Come on America - man up.

The reality is hardly any American families could bear this burden, and those that could (aka, the rich) could pay their own share, but you could confiscate all their wealth and it would not cover the liabilities and debt we have.

There is no question that we need to get smarter about what we are doing. The American lifestyle is bankrupting us. Our development pattern is financially unsustainable. This is no longer about the debt we pass along to our children and grandchildren. They are getting it. This is about the very concept of America we are passing on to them.

Does it have even a remote chance for greatness or have we already gone the way of the Romans and overindulged ourselves into unavoidable decline?

If we have any chance, Strong Towns need to be part of the solution.