by Adam Lee Buller

Created on: August 27, 2009   Last Updated: August 28, 2009

The recent credit crisis/credit crunch, whichever you prefer, has embedded one common thought into the psyche of the average American citizen. Debt is bad!

Although to some extent this is a welcome change as the average American consumer had become over extended to say the least, the above statement is not necessarily fact! Although people in general do well to have a healthy respect for debt, the world as we know it could not survive without it. Many a successful company, some of which may well be employers to the readers of this article, many a successful country, to which the readers of this article may well be inhabitants have used debt to create a foundation for economic prosperity and increased standards of living. Debt on any level, consumer, corporate, or national is only a problem when it cannot be serviced.

At what point debt becomes a problem on a national level is, at present, a subject of great debate. What is most important to the average American however is how the massive levels of national debt currently being incurred will affect them now and in the future. This will be the subject for the remainder of this article.

Effects of government debt in the present

Bear Stearns, TARP, Fiscal Stimulus. These are all things we have heard much about during 2008 - 2009. These "rescue packages", if you will, have highlighted the need for a change in the way we operate economically. These packages have added not millions, not billions but trillions to the national debt of the United States Of America! How has this increase in the national debt impacted presently on the finances of the average American? The answer is, not much really!

They certainly have not felt any negative effects, if anything the impact for the average American has been positive. Interest rates have plummeted to try and revive the faltering economy. This has proved to be very good news for mortgage borrowers not tied into a fixed rate mortgage, some of which have literally seen their mortgage payments drop to zero. The TARP program has helped to stabilize the US banking system and prevent it's collapse which would have been catastrophic for the average American and citizens of every other country the world over. The fiscal stimulus measures put in place have put more money into the pockets of the average American. What about those American homeowners who have suffered due to the economic crisis and became trapped in mortgages they could not afford? Well the US government stepped up

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