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Straight Talk By Al Jacobs
Straight Talk By Al Jacobs

By Al Jacobs

Traditions run deeply in America. On every Feb. 2, since 1887, the groundhog Punxsutawney Phil emerges, to great fanfare, from his home on Gobbler’s Knob to view his shadow. If it’s visible, there’ll be six more weeks of winter.

We’re in the process of developing another tradition. The U.S. national debt, which amidst a display of anguish reached $17 trillion on Oct. 25, 2013 increased to $18 trillion on Dec 2, 2014—403 days later. Thereafter, it surged to $19 trillion on Jan. 29, 2016—423 days this time. Once again an illusion of vituperation echoed throughout the nation. You may be certain that in the not too distant future we’ll hit the $20 trillion mark, on the way to forever.

Those who bemoan the ever-increasing national debt point out that it represents more than $58,000 for each man, woman and child in America. We are regularly reminded that this obligation must ultimately be assumed by our children and grandchildren. As to its cause, many persons place the blame on a do-nothing Congress and an unresponsive presidency. Although some analysts recommend a permanent debt limit, others call for a debt limit suspension or full repeal of the debt ceiling statute. And while the bickering goes on, we’re constantly warned that our inability to control the debt will bring our nation to the brink of default.

Let me now offer another slant on this controversy. What’s the actual significance of the national debt? It seems to pace itself against inflation; as the debt rises in dollars, the dollars fall in value. And there’s a fundamental difference between personal liability and collective liability. In the absence of joint and several liability, no one person will ever be held individually responsible. Very simply, although each citizen may theoretically be on the hook for $58,000 of the nation’s unpaid obligations, no single individual will be found legally liable to ante up any portion of the debt. It’s for this reason most persons ignore it.

The reality is, the debt will never fall due. To paraphrase the late USSR tyrant Josef Stalin, when your personal bank account is overdrawn by $150, it’s a problem. When the national budget is out of balance by umpteen trillion dollars, it’s a statistic.

Al Jacobs, a professional investor for nearly a half-century, issues a monthly newsletter in which he shares his financial knowledge and experience. It is available at


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