Shhh … Don’t tell anybody but, at current prices, Fort Knox holds enough gold to cover less than 2% of the $26 trillion National Debt.
I know that Halloween is still more than a month away, but it won’t be long before people will once again be looking for ways to scare the pants off unwitting friends and family members.
One way to do that without having to dress up like a ghost or goblin is by sharing this little piece of news: In June 2020, the US National Debt surpassed the $26 trillion mark. And if that’s not terrifying enough, check out the following witches’ brew of other chilling facts you probably didn’t know about the National Debt:
- Although the official US National Debt figure is $26 trillion, it would be $52 trillion higher if it included unfunded future obligations for Medicare, Medicaid and Social Security.
- In late December 2011, America’s debt-to-GDP ratio — an indicator of fiscal health — ominously surpassed the 100% mark.
- It could be worse: US debt reached 130% of GDP immediately following World War II. Today, America has the dubious honor of having the world’s 11th worst debt-to-GDP ratio at 105%. Even so, Japan (253%) and Italy (123%) are worse; they rank first and fourth, respectively.
- The next time you’re playing trivial pursuit, you might want to remember that the two countries with the lowest debt-to-GDP ratios are Brunei (3.3%) and Afghanistan (4.1%). Yes, that Afghanistan.
- Aside from Japan, the last nation to have a debt-to-GDP ratio above 200% was Zimbabwe in 2010. Not coincidentally, an epic case of hyperinflation all but destroyed their economy shortly thereafter.
- It took the US government 191 years from 1791 until 1982 to run up its first trillion dollars in debt. It only took four years after that for Congress to add another trillion dollars to the total.
- Twenty-six-trillion dollars is a hair-raising amount of money. In fact, it’s equivalent to roughly $80,000 for every man, woman, and child currently living in the United States.
- As a point of reference, if 26-trillion $1 bills were stacked on top of each other, they would stretch all the way to the moon. And back. And then almost back to the moon again.
- If you brought one trillion crisp one-dollar bills to the bank and handed the teller a dollar every second, it would take 32,000 years to completely transfer the money. And you thought pennies were a pain.
- Don’t blame inflation: Between 1946 and 1982, and after taking inflation into account, the National Debt remained virtually unchanged. Since then — with the notable exceptions of 2000 and 2001 — the National Debt has crept upward at an exponential pace.
- Our founding fathers were no better at managing debt than we are now. In 1791, the National Debt was a mere $75 million. That may seem minuscule, but at the time it represented a debt-to-GDP ratio of 40%.
- Thanks to Andrew Jackson, the National Debt was completely paid off on January 1, 1835; and the surplus revenues that year were then distributed to the states. To this day it remains the only time in history a major country has been debt free.
- The idea of balancing government budgets is not a new one. In 55 BC, Cicero told his fellow citizens that, “The budget should be balanced, the Treasury should be refilled, public debt should be reduced, and assistance to foreign lands should be curtailed lest Rome become bankrupt.” Nobody listened.
- The US government is currently borrowing at the rate of about $456 million every hour. That’s more than it paid to buy Alaska in 1867, after adjusting for inflation.
- He’s not that rich: This month Jeff Bezos’ became the first man to have a net worth of $200 billion. If he donated all of it to help slow down the increase in the US National Debt, his fortune would only cover 20 day’s worth of government expenses.
- China and Japan are the two biggest holders of American debt. Suckers.
- Yes, the US Treasury can always pay its creditors in gold. Unfortunately, the value of all the gold it currently holds at Fort Knox, as well as the Denver and West Point mints, is only $523 billion.
- I know what you’re thinking: Will China and Japan take a personal check? Nope — but the US government will. Just make it payable to the United States Treasury; in the memo section, note that it’s a “Gift to the debt held by the public” and mail your check to:
Gifts to the United States
US Department of the Treasury
Reporting and Analysis Branch 2
P.O. Box 1328
Parkersburg, WV 26106-1328
Then again, I suppose the mere thought of anyone even considering such a supernatural gesture seems downright, well … spooky.
Photo Credit: Cliff
A lot of people do not know about number 18! That’s so awesome…well, I guess not really.
Hi Len. You’d think with all the clever people who work in our financial institutions around the world that they would be able to control something as simple as a balance sheet. So why are all the countries in raging debt?? Well part of that is our own greed. Unlike our forefathers who were happy to save up for what they wanted, we want everything now. But that is not the real reason. Banks and other financial institutions make more money from debt than from anything else. They rake in more money the deeper the debt. Banks will eventually rule everything if they do not already.
Yep. That succinctly sums it all up, Cemlyn. That greed you speak of may not only eventually kill the goose that lays the golden eggs, it also continues to slowly chip away at the fabric of our society, and our faith in the system.
Wait, you can really write a check to the government for their debt? Unreal.
I also enjoyed the tidbit about Andrew Jackson as I am a history buff.
Our children and grandchildren will be very angry with us when this Ponzi scheme reaches its inevitable end.
It is sad our debt has reached this level. I just hope we deal with it before it gets any larger however unlikely that sounds.
We should make it a crime for anyone holding highest office if they fail to balance a budget. See how long it takes them to get their spending under control 😀
I prefer to stay in the US than living in Afghanistan!
I always thought that we Should pay congressmen and senators 1 million dollars a year if they balance the budget otherwise their normal salary if they dont. It would be so little compared to our debt.
Very interesting read, Len..
The scariest part of all of this is that it is getting so much worse every year. The deeper we dig, the higher a percentage of future budgets will have to be dedicated to interest on the debt, leaving less to pay for obligations like SS & Medicare (which will have their costs increasing regardless)..
Simple math says that we are on our way to major trouble in the not so distant future.
Hey Len! Thanks for putting me into the Halloween spirit.
I know that the Fort Knox gold would still only pay our way for only a few months, but it would be pretty fun to climb around on those mountains of gold bars and take some ‘Hey Look at Me’ pictures.
For those who are interested, if you believe the last official audit, total US reserves are currently 261.499 million troy ounces. More than half of those (approximately 147 million ounces) reside at Fort Knox.
This makes me sick. I can’t believe the statistics are so crazy. I found it particularly interesting to see other countries’ debt levels. I didn’t know Zimbabwe was so inflated.
To be honest, I knew about #18. But I’m more interested in working on MY debt first!
We have a higher debt per capita than Greece does. What does that say about America?
I think your 0.02% figure should be 2%
Yep. Good catch, MB! It has been corrected.
When I was in college way back in the mid 1950, one of my perfessers said about the national debt: “We owe that money to ourselves”.
Even then, if one wanted to get a good grade, one did not cross the faculty, so I only thought to myself; “Goody! I can forgive my share and stop paying taxes.”
That is scary Len, and absolutely interesting fact about Afghanistan. It’s funny in the environmental movement so much can be in a more fiscally responsible way. I really hope true conservatives, fiscally responsible, get involved in saving the earth. Sometiems the easiest way to repair nature is to leave it alone or let true market forces (by taking certain large corporate subsidies away) lead folks to be sustainable choices. I was involved in one advocacy call and the democratic state senator’s answer was to open another bureacratic office??? As someoen who helps run a department, this is not the way to manage an organization – just throwing more money at something. Hopefully California republicans can bring some fiscal discipine to things. I really think we can do both togehter, save the economy, save the earth and not run up the debt. I’ve picked up 300 bags of ocean plastic pollution now and all that exercise helped my health, and didn’t cost me a thing. And some “environmental groups” would have charged unwitting consumers literally $20 “eco-bracelet” for 1 pound of garbage. So really I donated 6000 to the earth. But I don’t think anyone should pay be $6000 for picking up trash. The world really doesn’t make sense right now. Anyway, thanks for continuing to highlight this ridiculous debt.
Thank you, Dr. P … for both your comment and taking the time and effort to clean up our ocean!
I believe Greece was at 113% debt to GDP when they went down for the count. But they can’t print “money” like we can. If only there was a way to predict when this whole charde was about take a hard stop.
Unfortunately there is no near-term, direct consequence to loading up on debt. We’ve racked it up this year to no apparent determent. 26 trillion, heck why not double it again? There will be no action until the currency devalues significantly, inflation takes off noticeably, the cost of debt skyrockets, etc. Only then will the politicians have a reason to do something. It is not real to the voters. Heard a pundit today say “we need to have a hard shutdown to stop COVID, just pay everyone their lost wages.” Ok, another few trillion dollars…
So what, makes no apparent difference. The debt is just to intangible to be real.
States have to balance their budgets, so they have to lay-off workers, cut programs, etc. This generally keeps them in check. No such cause and effect at the federal level.