Despite the presence of several debt relief options like
debtsettlement and debt consolidation etc, a common American nowadays cannot evade form the negative effects of national debt upon his personal finances. The current US national debt which is $11, 764 billion is the sum total of amount of the public debt (Treasure bills, Notes and Bonds sold to public) and government debt (amounts borrowed from foreign governments and restricted government funds). The volatile interest rates for borrowing and investing, the federal income tax, prices paid for groceries and the unemployment rates; all these and many more financial circumstances are affected by the growing national debt burdens. The national debt thus will affect a common American citizen in the following ways
#The US government operates on tax revenues, but in case it spends more than it receives, there is a budget deficit and in such a condition government is faced with choices between raising taxes or selling treasury bills and government bonds and borrowing money, which certainly affect the financial state of individual American.
#As the American economy is based on supply and demand, the average citizens would be laid off if the demand exceeds supply or vice versa, in response to which the Federal Reserve would determine the rate of interests that in turn stimulates the national economy for everyone alike.
#American Recovery and Reinvestment Act states the idea of less income tax payment by average citizens, but in other hand the federal government borrows more money to develop economy form social security trust fund and foreign governments, leading the Recovery Act to increase unemployment benefits and provided tax cuts, which in turn will increase the amount of money to be spent by people.
Thus the effect of national debt on personal finances can be manifold including the dynamism of interest rates and other negative factors like unemployment, recessions, decreased spending power, increased taxes and many more which also subtly affects the citizens" lives and psyches. In many circumstances, it causes drain of human resource as citizens migrate to other nations in order to avoid any sort of personal financial destruction or instability that reflects in national economy. Thus a deplorable national debt and deficit always stir fearful and panicky thoughts in minds of every individual citizen, which is directly correlated with his personal financial independence and economic progress.
