OK so we have all heard the numbers. The US is $15 trillion in debt, and we are told that this comes out to ~$50,000 per person. For you and I (this assumes there aren’t any of the 1% reading this blog) this is a big, very scary number. But this is a simple division by the population. In reality, if a bill was to come due we would all pay a percentage based on our wealth and income.
So let’s do a little math.
The population of the US is estimated to be ~311 million, giving us the $50K number above. Now lets look at the US wealth and income distributions. I got the numbers from Mother Jones as I had the article handy,
If we divvy up the debt by share of wealth:
The average 1% share is $1.67 million
The average 1-10% share is $206,599
The average 90% share is $14,435
If we compare this with the average incomes the results look skewed. The bottom 90% owe roughly half of their yearly income while the top 1% owe roughly 145% of their yearly income. This is due to the higher wealth to income ratio of higher income earners compared to lower income earners. Assuming a balanced-ish budget, we could mostly pay this down over 10 years with a 5% income surtax or over 20 years with a 2.5% surtax. If we include corporate income the surtaxes would drop a bit more.
Another way to look at this is strictly in terms of national wealth. The current aggregate national wealth is about $50 trillion. So the national debt is 30% of the national wealth. Using this as a basis, the debt would be retired if everyone paid 3% of their wealth each year for 10 years or 1.5% per year over 20 years.
These are admittedly very simplistic calculations, but what they show is that while the situation sucks, it is entirely manageable, especially if you consider the debt has been decades in the making. In fact, simply going back to the Clinton Era tax rates would be a huge step in the right direction. There is no reason to shred our safety net, abandon environmental regulations, labor regulation, gut schools and public services, all in the name of debt reduction. It is a red herring we are being fed in an attempt to lead us into another gilded age.