Your Neighbors Want Their $60,000!
Hey, you!—Yeah, I mean you, fella!
Your neighbors sent me to get some answers. Yeah, your neighbors—you know, the ones on the right, and on the left, and across the street—all around you.
It's about the money you owe 'em. Like, you sorta forgot about it, huh. It's gotten to be quite a piece of change over the years. It's over $60,000 now—with the interest and all.
Well, you borrowed it a little bit at a time, over the years. In fact—a little of it—your mom and dad borrowed, but they promised you'd pay it back. It wouldn't be so bad, but you've only paid a few bucks since 1969, and you keep askin' for more!
I'm sure you spent it all. Probably don't even remember what you got for it. The neighbors say you bought some weapons. Yeah, some missiles and boats. And some planes. Big stuff. Lot of it was nuclear. Do you still use that stuff?
Listen, your neighbors are bein' real decent about this. They'll work it out with you. They just think maybe you should start thinkin' about it. Like I say, they're chargin' you interest, just like at the bank. Yeah, the interest is addin' up pretty fast. It's over $250 a month now. Just the interest.
It'll take you a while to pay it back. But they'll be patient. Just start makin' regular payments. The payments have to be bigger than the interest, of course. Say you want to take thirty years to pay—that'll cost you just $332 a month. But look, the neighbors aren't pushin' you. Take longer if you want. If you want to stretch it out for fifty years, your payment's only $280 a month—or go a hundred years. That's $258 a month. Then you can let your kids finish it up for you. What goes around comes around, eh?
Yeah, maybe that hundred-year deal ain't the best way. That last fifty years—the payments only go down twenty-two dollars a month. That $332 payment for thirty years sounds like your best bet.
(The figures above were correct in December, 2007. Payoff amounts are controlled by interest rates, and the interest figures can vary widely month-to-month; see the National Debt Numbers at a Glance page for the most recent payoff figures. Remember, these numbers might be higher or lower next month, but they are rising over the long term.)
Now, if you want to wait a while before you start payin' it off—that's O. K. too. Your neighbors are really very nice. See, they've got a system. If Paul needs you to pay what you owe him, and if you can't do it, then Peter kicks in. He loans you the money to pay Paul. Then you just pay Peter later, with the interest of course. These are great neighbors you've got.
It's a good thing they can do that, too—because Paul really does need the money. His kids are goin' to college, and his mother needs some doctorin'.
Of course, if you wait a while to start paying it, the payments do get a little bigger. It's the interest again, you know. Every month you don't pay the interest, the thirty year monthly payment goes up about a buck-fifty. So, if you wait a year, it'll be about $350; two years about $368—like that.
But that's if interest stays low, like it is now. They tell me interest rates are as low as they've been for a long, long time. Think they'll stay that low? I don't know, but when the rates go up—I mean if they go up—those payments will shoot right up there. A couple of percentage points of interest will raise the payment about seventy dollars a month.
But you really have to quit borrowin' more! With what you're borrowing now, your payment is goin' up every month.
I guess it might be best if you started payin' up now. And you better quit buying those airplanes and boats. That makes it worse, doesn't it? Whew, it's gonna be tough to pay that much, on top of your bills, and the taxes and all. But it'll be a lot worse in a few years.
I'm sure glad you've got those friendly neighbors. Kinda comfortin' ain't it.
I suppose you've figured out what this little story is about. It's about you, of course. You're the one who owes the neighbors more than $60,000. That's your personal share, as an employed person, of the U. S. national debt. It's real money, owed to real people, who must be paid back. And it has to be paid back by working people, like you, because only working people have the income to pay it.
As a person with a job, your share of the interest on the debt is about $250 per month right now. And it will go up, as the debt gets bigger, and interest rates rise. If our nation is to be free of the debt in a hundred years, you have to start paying $258 per month now. Or, you could choose to pay the $332, for only thirty years. It'll save you and your children, and grandchildren a lot of money.
If government spending is reduced, that reduces the amount you have to pay. The truth about that possibility, though, is that it's severely limited. Almost half of the nation's expenditures can't be cut at all. Most of the remaining amount can be reduced by only a limited amount. If welfare, social services, housing assistance, and food assistance were eliminated entirely, it would only save you about $80 per month. If all the administrative costs of running the government were eliminated, that would save you about $10 per month. Of course, none of those things can be entirely eliminated. So you're going to have to pay most of that $322 per month in higher taxes, starting now, or you'll have to pay much more than that later.
(The figures above were updated in December, 2007; see the National Debt Numbers at a Glance page
for current numbers.