The U.S. Debt Per Person — Man, Woman, and Child
How does a voter get his or her mind around our national debt? Did its size truly register when it was $20 trillion during the 2016 election or $27 trillion during the 2020 election? Or over $36 trillion now? It’s in trillions. That term seems more like one used by kids to describe something beyond huge.
So! I am presenting here our national debt PER PERSON. I haven’t seen it presented that way in the media. But we voters are all people. And this is a debt burden our children assume when born.
It takes time to address this challenge. However, the need to solve it is immediate.
The chart in the following link not only personalizes the national debt. It also shows the incredible burden we have placed on even the newest newborn in the U.S. I converted the historical debt amounts to 2024 dollars, taking inflation’s impact out of the picture. (September 30th marks the federal fiscal year-end in recent decades.) Then I divided each year-end’s debt balance by the population at that time. (Calculation details are shown in the chart at the bottom of this post.)
The story here is the trend. The point is this. We have been ignoring the massive problem we are leaving to our children for decades. A child born in 1930 began life with a $2,476 U.S. debt burden. A child born last September started out with a $103,754 load to carry. (Of course, no newborn is in the working world yet. The U.S. debt per person solely in the adult working world is substantially higher.)
The more adult version of a “personalized” U.S. debt burden is looking at what that obligation is for a family of four. I multiplied the individual amount by four. A family of four is essentially carrying another mortgage. That number is $415,017.
Click on the LINK below to find the chart showing debt-per-person since 1930. First by decades, then by year since 2000. The column on the right refers to the family of four.
US Debt per person and household 2024$
Two observations. First, reversing our debt’s continuous growth isn’t easy, but it is an imperative we all share. Second, paying the interest and principal on this debt when due is at the top of our priorities. If we don’t pay the interest on the debt, we won’t be able to borrow. At least not at present market rates for sovereign borrowers with a high-quality credit profile. Not only would we pay more interest on more debt, but at a higher interest rate. A double whammy. The market drives interest rates, not our hopes.
You may react to this per-person view by thinking that children don’t work. Well, of course. I calculated the debt burden carried by adults of working age when I posted last year’s calculation. Here’s that approximation, to illustrate the substantial increase in the working adult per-person calculation. The 2020 census showed that 22.1% of the population were under 18. 16.8% were 65 or over. I applied those percentages to the 2023 population, then divided the debt by that number. The debt per working-age adult in 2023 was $159,659,523. For comparison, let’s say $160,000 per working adult, versus about $100,000 per man, woman, and child.
Another View: Comparing Our Debt to Our National Income
Like any household budget, the U.S.’s ability to pay interest and principal on its debt is related to its income. The snapshot for our national income is the Gross Domestic Product, or GDP. Comparing debt to GDP is a standard measurement for assessing how challenging the debt burden might be for a country. It is expressed as a percentage.
The St. Louis Fed presents a chart showing that percentage since World War II. 1939 to 2023. As you will see, the ratio peaked in 2020 at about 130%. It has varied within the neighborhood of 120% since then.
https://fred.stlouisfed.org/series/GFDGDPA188S
The following LINK is a St. Louis Fed debt-to-GDP chart through 2024.
https://fred.stlouisfed.org/series/gfdegdq188S
The United States carried a high debt-to-GDP ratio after the war, similar to our present ratio. But the situation was very different. Even Republicans agreed to substantially raise tax rates to pay down that debt after the war’s end*. The debt had been incurred for a single major reason — to fight the war. That level of spending stopped after the war’s end. The increase in debt in recent decades was from a variety of expenditure types — wars, financial bubbles, and social programs among others — without a decline.
When the credit rating agency Standard & Poor’s downgraded the debt of the United States from AAA to AA+ in August of 2011, it faced an assault from the U.S. government. S&P’s CEO resigned. The other two major rating agencies changed their outlook to negative. The Debt-to-GDP ratio at that time in 2011 was about 80%. Maybe one shouldn’t rely on those “canaries in the mine” to warn us that we are heading into choppy waters.
I’m not trying to point a finger at any party or group. I suggest looking at the debt burden with an open mind. It’s a burden that unites us only in that we all share it.
Here’s a chart that shows annual U.S. budget history from 1980 to 2024. The numbers are from the White House Office of Management and Budget. There are three budget series. “On-Budget” which reflects the every-day operations of the government. “Off-Budget” which is largely the Social Security/Disability program because of its structure, separated by law from the general funds. The third is the total of the two. I added the Presidential administrations for reference.
The red shows deficits. Social Security had deficit issues before the Baby Boomers entered the workforce and in recent years is once again in deficit. (It is drawing down the Trust Fund reserves to pay benefits.) Note that the Clinton administration benefited from the Baby Boomers impact on Social Security. The Social Security surpluses offset deficits in two of the years. One can see the sudden increase in deficits from the dot-com bubble’s crash in 2000, the bursting of the subprime/derivatives bubble of 2007/2008, and the recent impact of the world’s first truly global pandemic in 2020.
Stay Informed: The Current U.S. Debt
Click on the following link to see the U.S. Treasury Department’s “debt to the penny” presentation as of the most recent close of business. It’s our national debt balance on the books of the Treasury Department, published for all to see. By our government. Transparency.
LINK:
https://fiscaldata.treasury.gov/datasets/debt-to-the-penny/debt-to-the-penny
The following site has been popular since my banking days. The Debt Clock. Watch the debt grow. LINK:
* Look up U.S. federal tax rate history. There’s irony in it. Even Republicans agreed to increase the tax rates to pay down debt incurred for WWII. I was surprised to find that the highest rate was 91%. President Kennedy proposed lowering it, and President Johnson pushed it through Congress after Kennedy’s assassination. Both were Democrats. Pushing for tax cuts. Ironic. 91% seems confiscatory. Of course, it’s the structure of the whole tax system that needs reform.
A Postscript from My Grandfather
My mother gave me a scrap of paper with a handwritten note. My grandfather, Charles Grant, wrote down his thoughts on “the wizards of Washington” and their budget math. He was born in the mountains of Tennessee and was largely self-educated. But he had pure common sense. A gentle giant with a big, compassionate heart. Here, for you and for my family members, is what he said. And the handwritten version. He really did write this. Charles Grant on federal spending, tax cuts, and the debt. (I’m guessing that he wrote this in 1963 or 1964, right before he died. When the post-World War II tax rates were first reduced.)
CharlesGrantonFederalDebtandSpending
CharlesGrantonFederalTaxesvsSpendingHandwritten
How I Removed Inflation from the Calculations
Here is a chart showing how I removed inflation from the picture. Using the Minneapolis Fed’s inflation calculator, I calculated inflation factors by comparing the value of $1 in the historic year with its 2024 value in each year. Then I used that number to convert the historic U.S. debt numbers to 2024 dollars. For ease of vision, I present them in billions of dollars in the right-hand column.
Precision isn’t required here. Others may go about this in a different way. My sole point is the trend and magnitude, expressed in a way that can be better appreciated by an individual. The LINK:
US Debt per person in 2024$ since 1930
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