More on indebtedness

From my previous post you can establish that today, the US Federal Government debt, on a per person basis, roughly 70% of the average personal income.

The Federal debt amounts to 8.35 trillion dollars.

From this Federal Reserve page, you can establish that household debt payments (both mortgage and non-mortgage) consume almost 14% of disposable personal income and the total debt exceeds 10.0 trillion dollars. This amount of debt is larger than the Federal debt and is no doubt at a higher interest rate, but it should be clear that a non-trivial portion of one's income before and after taxes is going to service indebtedness of various sorts.

Anyway, personal debt is running at more than 80% of annual income.

I should be able to find state and municipal debt on the previous links, but somehow am missing it. Here is another link. From it you can establish in 2002, the US state and municipal debt amounted to 1.4 trillion dollars, a pittance compared to personal and Federal government debt. It amounts to roughly 12% of personal income.

Thus, today, the debt that an American bears in amount is somewhat more than a year and a half of personal income.

The saving grace is that US debt is in US currency. Just for a rough comparison, Argentina had $120 billion of external debt when it ran into trouble in the 90s, when the economy (GDP) was roughly $180 billion (my guesstimates), or a debt of two-thirds of national income. I cannot repeat the per capita indebtness estimate for Argentina; I wouldn't know where from to get the data. The Argentines had to delink their currency from the dollar and devalue the currency, or else see dollar flight from the country and go into default. Presumably the US can inflate its way out of debt, but at the cost of future investor confidence.