American National Debt

[ShadowHM]

Only one minor point there, from the CPI data it looks like 30-50% (in the various states) is spent towards shelter.  I am assuming that most of this is payment of a mortgage (yes, a really big weak assumption, but I couldn't find anything better), so the average US individual is happy paying a higher rate of income towards interest costs than the 13% or so that the government does.

..pause...
OK, found some slightly better info, but older at (http://www.signonsandiego.com/uniontrib/...arney.html)
"Back in the early 1980s, according to Lereah's research, typical household debt ratios exceeded 30 percent. That is, a family's total debt service payments ate up 30 percent or more of household income each month. In the late 1980s and early 1990s, ratios dropped into the 22 percent range. Currently, by contrast, average household debt service ratios are in the 17 percent to 17½ percent range."

So again it looks like the Government spending is within what the average household would do.  Also found that the average household debt is at about 115% of income, whereas the governments was considerably less than 100% and they pay lower interest rates than a household.
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Serendipity strikes. :)

The latest copy of Macleans magazine had this article on household debt in Canada. I would be rather surprised if it is too much different than the case in the U.S. of A.

Significant statistics (all numbers in current dollars, i.e. adjusted for inflation, sources Statistics Canada and the Bank of Canada):

1970's Household savings rate 14%
Mortgages $147 billion
Credit Cards N/A
Lines of Credit N/A

1980's Household savings rate 15.8%
Mortgages $197 billion
Credit Cards $8 billion
Lines of Credit $4 billion

1990's Household savings rate 9.2%
Mortgages $408 billion
Credit Cards $19 billion
Lines of Credit $57 billion

2000's Household savings rate 1.4%
Mortgages $531 billion
Credit Cards $32 billion
Lines of Credit $66 billion

Additionally, from 1993 to 2003 the rate of personal bankruptcies rose by 52%.

It seems that households in Canada are spending with the same merry abandon that governments are. :( They are not just taking out loans for homes (shelter). They are taking out loans for lifestyle costs.

However, it is still a concern that governments are running deficits and failing to pay off their outstanding loans. The only security that any government can offer for a loan taken is their ability to tax their citizens. I would argue that, in general, there is no such thing as 'capital spending' for a government beyond making sure they have citizens who can pay taxes. And, oddly enough, education is not a federal jurisdiction in this country, but a provincial one. Ensuring a robust economy, while not entirely within the ability of a federal government, is certainly the kind of thing they do try to promote. Certainly that is some of the excuse offered for excess spending - they are 'stimulating' the economy. ;)

As I said in the first post, any form of fixed payment that the government has no ability to alter is a threat to their ability to respond to the needs of their citizens. Reduced flexibility in the face of changing times (and we do live in interesting times, do we not?) is a long term threat to the citizens of the country. And that is why it remains a concern to see the American government (and my government) choose to run a deficit every year.

A couple of other points:

Only one minor point there, from the CPI data it looks like 30-50% (in the various states) is spent towards shelter.  I am assuming that most of this is payment of a mortgage (yes, a really big weak assumption, but I couldn't find anything better)

In many cases, 'shelter costs' means rent for your apartment/house, not a mortgage payment.

Also found that the average household debt is at about 115% of income

Does this figure include mortgages? I find it surprisingly low, given the average cost of a house compared to average income here.