Jim Jubak explains what that, and other debt, mean for you.
That $9.4 trillion is just part of what we as a nation owe collectively. There's also the $700 billion trade deficit we ran up in 2007 as a result of importing more than we exported.
And then there's what we owe individually. Like the $950 billion in credit card debt we owed as of the end of March. And the $1.6 trillion in auto loans and other nonrevolving debt.
Face it: We live in a debt-addicted culture.
One day, the bill for all that debt will come due. That's a dead certainty. As sure as it is that the interest due on the federal debt will show up in the income tax you pay next year. And the year after.
We'll pay some of that bill directly, as formal taxes. And we'll pay some of it indirectly — maybe even so gradually we won't notice — as what I'd call informal taxes, such as lower living standards and a sinking U.S. dollar. But pay it we will.
Jubak then delivers on his promise to spend the rest of his column depressing the hell out of his readers.
First, credit card debt is up 20 percent in ground zero of the subprime crisis, Nevada, followed closely by 15 percent jumps in California and Florida. But, that probably won’t go far enough, especially with stagnant wages.
Second, when the “good times” come back, they won’t be as good as in the past, due to inflation, Jubak says.
Third, Congress simply can’t afford to index the Alternative Minimum Tax for inflation, let alone raise its bottom line.
Fourth, the government may look to new tax sources. Jubak says, hold on to your 401(k). And he’s not joking. There’s $4 trillion in IRAs, he says, a tempting target for changes in tax code.
Jubak promises a solution of sorts in his next column. He says it’s called “infrastructure.” Sounds good to me.
Meanwhile, the Street knows we haven’t turned the corner yet.
No comments:
Post a Comment