The most recent official government figures I found were from 2011. Their figure was 56.9%. cite. The percentage went up in 2009, 2010, and 2011. So I projected another slight increase and called it around 60% for 2012.
Yes.
Obviously.
If big numbers make you dizzy, here is a conversion rate that might be helpful. The total income of the United States in 2011 was exactly 1 Magic Space Doubloon. This year, if current trends continue, that income will be approximately 1.08 Magic Space Doubloons. The federal government’s total revenue out of that income this year should maybe be around 0.18 MSDs.
The total debt held by the public is in the range of 0.80 MSDs. If we say the average interest payment for outstanding debt is around 2.5%, that means that the total interest burden on this debt is about 0.02 MSDs annually. (That is likely a slight overstatement. We could get more accurate numbers if we cared.) This average interest burden is currently decreasing as Treasury and the Fed take advantage of low rates to refinance the mortgage, so to speak. In fact, given current inflation expectations, the government is borrowing now at negative real interest rates. Quite a good time to be borrowing and rolling over those old securities.
So, out of a total tax revenue of 0.18 Magic Space Doubloons, the federal government must make interest payments of 0.02 Magic Space Doubloons. The interest burden is a mere two Magic Space Cents.
How can you possibly believe that is not manageable?
Obviously, when more of our tax payments go to pay interest to bond holders, we have less revenue available for valuable public services. This is potentially problematic. It becomes more problematic if deficits are out of control, but hey, that’s not a worry at the moment. If we look at the evidence, we can see that the size of the yearly deficit has been quickly decreasing as a percent of GDP, and might even come in at less than 5% of GDP this year. So we’re adding less to the total debt every year right now, when we consider the total income of the country. We’re not out of the woods yet, but we’re on that path. In fact, it’s quite likely that we are decreasing the deficit too quickly, given the current state of the economy and considering how ridiculously cheap the government can borrow.
These are actual numbers, seen through a convenient conversion for simplicity. A little basic arithmetic will trump a surfeit of punctuation every time.
Well, there’s a lot of factually wrong information in the above…
1% doesn’t own 99%.
US exports a lot. We’re the third largest exporter by dollar amount, at $2.2 trillion.
What world war? Was this post written in 1938?
Taxes can go higher
Many people here have debts that, in total, they couldn’t pay off if they dedicated 100% of their after-tax income to paying it off. Is a person with a $70k salary and a $100k mortgage “in trouble”?
What do you expect to “replace” the dollar? The Euro? The Yen? The Yuan?
This.
A country’s budget and your household budget are not comparable. Paul Krugman, Nobel prize winning columnist of the New York Times, has been singing this song but no one will listen.
Exactly. And as long as the debt-to-GDP ratio goes down at least as much in the good times as it goes up in the bad times, then everything’s sustainable.
An important thing to keep in mind is that the real wealth of a country isn’t in green pieces of paper or their electronic equivalents, but in the goods and services we produce. Over the past four years, we’ve been effectively making ourselves poorer than we had to be by having people, plant and equipment, and money lying idle that could have been put to productive use.
The first step is to get everyone back to work, earning money and paying taxes. Once that’s accomplished, all our other economic problems will still be there, but won’t be nearly as intimidating.
If you want to worry about something, then worry about the underfunded obligations of Social Security, Medicare, Medicaid, and all the other programs out there.
Along these lines, can someone help me complete this sentence: “Your household budget would be like a country’s budget if…”
For use in arguments in which someone evokes the “the U.S. should run its budget like I run mine!” thing.
Also, the US government has lots of assets that are worth a lot of money. Just like you owe money on your mortgage but also own a lot of equity in your house, the US government owns vast tracts of land, aircraft carriers, post offices, and on and on. That stuff is worth a lot.
Grin! Thank you, seriously, for putting it in simpler terms.
(In an astronomy course, the teacher emphasized the advantages of “canonical units.” Instead of saying the Earth is 98,000,000 miles from the sun, just say “1 AU.” Then measure other distances in AUs. Makes things easier. 1 Light Year. 1 degree of latitude. 1 Work Week. etc.)
nitpick, I think increases BY 200% means it’ll actually increase TO $150,000.
Another nitpick, but a bigger nit, the budget and the deficit are for all practical purposes 2 different issues. I believe that it’s healthy to have debt but the budget should still be more or less balanced if it can be helped.
14 million on foodstamps seems like a sizeable underclass to me.
4% of the population isn’t exactly what I think of when someone mentions a “vast underclass.”
Being on food stamps != being part of “the underclass”.
41% of huseholds on foodstamps had earnings, that is, someone in them had a job.
Cite..
We still have high unemployment. We still have inadequate wage increases for the middle classes and below. So, I trust you support a living wage and stimulus programs to increase employment, both of which would reduce food stamp use.
Odd how all the lazy bums got jobs in the '90s when we had full employment, isn’t it?
That reminds me of this Feynman quote I read from American Scientist:
Our normal frame of reference are the sorts of numbers we encounter in our everyday lives, like our annual salary and the size of a typical mortgage. We relate comfortably to these numbers because of long personal experience, so when we’re hit with something that is many orders of magnitude outside that experience – such as the budget of a nation of more than three hundred million people – we completely lose our instinctive feel for the relative magnitudes.
Creating a new scale can help bypass the unhelpful emotional reaction. Another useful example for this thread: spending on food assistance in the US last year was about 0.005 Magic Space Doubloons. Hardly a budget buster, especially for something as important as getting food for hungry people.
I’d agree if foodstamps were only used for food, but as with any government programme, it’s been subverted so lots of other things can be purchased that have nothing to do with nutrition.
Like all those Cadillac dealerships that allow for car payments with food stamps? Those welfare queens are totally ripping off this country!
Never mind that those stories are total fiction, this has to be stopped before it ever exists!!
With the unshakable conviction with which you make that statement, I am sure you have a cite. Right?
For whatever it’s worth, the rest of the internets seems to think that the number of Americans on food stamps is more like 47.8 million, which is still short of “vast”, but is more significant.
Fourteen million on foodstamps would basically be victory in the war on poverty.
“…You could print your own money, take money away from other people at will, and if you were more interested in getting re-elected than being responsible.”
Regards,
Shodan