ajax18 wrote:So... if I make $150,000 every year, am I in trouble because I have a $160,000 mortgage balance and various expenses related to home ownership and living?
I sure wish I could live on the black side of financial life rather than the red. It's the difference between owning my own business and working for someone else.
That's the rub.
What you really need to understand is that U.S. Treasuries (i.e. the financial instruments that the national debt is made of) aren't real assets or real liabilities. They are financial assets and liabilities.
What that means is this: while it's true that the U.S. Government as a whole has a $16 trillion (or whatever) liability, it's also true that a subset of individuals and corporations have a $16 trillion asset. When you aggregate everybody's balance sheets, the $16 trillion that the government owes is cancelled out by the individuals who loaned them the money.
This debt and the interest continuously paid on it is one of the mechanisms that causes one group of people to be the working poor and another group of people to be the non-working super-wealthy.
Perhaps what you should be hoping for is a big shot of inflation. Think about it--if the value of the dollar goes down by 90%, then the price of an eye exam would increase from $50 to $500, and your income would increase by a factor of 10. The price of all of the goods and services you buy would also increase by a factor of 10, so that in real terms, it's like you still make $100,000 or whatever.
However, in real terms the national debt would drop from $16 trillion to $1.6 trillion. In real terms, what you owe on your house would drop from $250,000 to $25,000. In real terms, what you owe on your student loans would drop from $90,000 to $9,000.
Of course the other side of this is that the people who loaned you (and the federal government) the money will lose their shirts. But that is the natural order of things--in math, your wealth can grow exponentially forever, but in the real world, gravity evens things out.