How to Pay Down the National Debt
For a start, everyone has to switch their car insurance to save an average of $785!
You know about the National Debt. It stands at $29 trillion, or will be by the time you read this. Some economists wonder how will we ever pay it off, while others don’t.
But have you heard of unfunded pension liabilities? Collectively, the fifty state governments are in hock for $5.8 trillion to former government employees. This number came up as soon I entered the first few letters of my search terms in Google so I know lots of other people have been looking it up, as well.
Then there’s “household debt,” what people owe on their credit cards, mortgages, and car loans, but probably not to their “sports books,” i.e., gambling debts. Household debt in America totals to $15 trillion.
Combined, we’re talking about $49.8 trillion of debt, or 49,800,000,000,000; that’s more money than there are stars in the universe! Unless you believe in, you know, multiple universes!
Sadly, no one in Washington, or state capitals from Madison, Wisconsin to Austin, Texas, or from Sacramento, California or Albany, New York appears to know what to do about this.
So, it falls on me!
First, everyone has to switch their car insurance. The savings will be up to $785 per driver. I mean, they don’t run phony ads on television, do they? In 2019 there were 229 million licensed drivers in the US. Let’s say, optimistically, that 200 million actually had insurance on their cars. We won’t count unlicensed drivers; I just have a feeling they don’t buy car insurance. Two drivers in one household may drive the same car, but one driver may own two cars. For ease of calculation, I’m assuming one car per driver.
So, 200 million times 785 equals $157 billion.
Well, it’s a start.
Next, you have to switch your “pay TV” provider, which may be cable or a streaming service or whatever new gimmick is coming down the pike. There are 79 million households that pay for their television programming. That’s a staggering figure for all sorts of reasons, but it’s the money we are calculating here, not passing judgment. I’ve never had cable but I do see ads, such as the ones that promise something like $40 off if you “bundle” with your cell phone. I’ll get to cell phones next, but let’s say those 79 million people actually switch their cable or streaming service for any of several lower cost options and save $40 each – that’s a further $3.16 billion we can give to the government. Okay, @JeffBezos would spit on that number, but look – we’re already reduced our debt by more than $160 billion!
Now, cell phones: There were 298 million cell phones in the US in 2021, and according to a report on CNBC, the average cell phone bill was $127 last year. It’s not clear how many of those bills were for “family plans” or individual lines. For the sake of argument let’s say that’s the price for 298 million individual lines. @CNBC estimates that “unlimited” plans from the major carriers range from $60 to $70 per line, and pre-paid phones, which will not necessarily give you “unlimited” talk, text and data, can be as low as $30 each.
Are you still following this? I was getting worried.
Anyway, I’m going to assume that 298 million Americans can cut their cell phone bill from $127 to $60 each, which means a saving of $67 per. So, 298 million times 67 equals $19.996 billion! That’s a mouthwatering number, unless your name is Jerome Powell and you’re Chair of the @federalreserve.
But look at this – we’re now up to nearly $180 billion in savings and we only have $49.6 trillion to go!
Now for another big cost savings – refi! The average home mortgage debt in America is $213,000, and there are 79.36 owner-occupied homes in America. For ease of calculation, let’s say every homeowner could save $60,000 in interest costs by refinancing. That’s only a guess, true, but no worse than promoting a $1.2 trillion infrastructure bill that’s “fully paid for.”
Well, rounding off the number of home owners to 80 million, then multiplying by the average projected savings of $60,000, we can expect a total savings $4.8 trillion! Now we’re cooking. Less than $45 trillion to go!
Of course, some Americans may be unhappy none of these savings will accrue to them but instead will need to go to reduce the national debt and unfunded pension liabilities – paying down household debt is lower on the priority list, unfortunately, but at least they can take comfort in the knowledge that they are helping save the patria. Maybe.
Neither the Office of Management and Budget nor the Congressional Budget Office had any part in preparing this document. It has not been approved by either the Democratic National Committee or Republican National Committee. While all calculations are believed to be accurate none is warranted or guaranteed (see OMB and CBO).
Loved it! Also we need to cut down on starbucks, nespresso, and netflix. :)
What a hoot!
I am truly enjoying your articles.