The US finances portrayed as an average household

There are numerous finance articles that attempt to present the magnitude of the US government's financial condition by trying to portray the size of billions and trillions of dollars to the reader. I'm going to take a different approach which will detail the finances as if they belonged to an average household in the US.

I will use the 2010 US fiscal year for my example. I will indicate the corresponding US government financial number in parenthesis. Here we go.

You have a salary of $50,000 ($2.162 trillion in tax receipts).

Unfortunately you spent $80,000 ($3.456 trillion in government expenditures).

This means you had to borrow $30,000 ($1.294 trillion deficit) in 2010.

Borrowing to meet expenses has been your mode of operation for quite a few years so you have accumulated some debt.

Your current debt balance is $314,000 ($13.562 trillion debt).

In 2010 you payed $10,000 in interest ($0.414 trillion interest expense). That means 20% of your current income goes to paying interest on your debt. Continuing to borrow will increase your debt balance which will increase your future interest payments.

You borrowed 64% of the money from others (public debt) and borrowed the rest from your retirement/medical savings accounts (social security, medicare, medicaid). Your retirement/medical savings accounts are completely drained.

Your debt more closely resembles credit card debt rather than mortgage debt. Of the money you borrowed from others, 70% is due for repayment in the next 5 years. About 90% is due for repayment in the next 10 years. See chart below.


In the past you had many people willing to lend you money, regardless of your substantial indebtedness, at very attractive rates. Some people have started to become skeptical of your ability to pay back your debt and have thus stopped lending you money (China). Lucky for you there is a lender who stepped in and seems to have an endless supply of money with which to buy your debt.