My fellow taxpayers, this is your quarterly warning that Uncle Sam is not a good steward of your money. The Congressional Budget Office just released its most recent 10-year projections for federal spending and revenues. The picture is not pretty. A quick overview: This fiscal year, 2020, the federal government will collect $3.6 trillion in tax revenues. But due to its spending addiction, the government will expend $4.6 trillion. This means that the government will have to borrow $1 trillion this year alone, in order to cover a deficit of 4.6 percent of GDP. This is the first trillion-dollar deficit not due to a global recession. The money to fund the deficit comes from individual and institutional investors, both domestic and foreign. And for all the anti-China rhetoric out there, it's worth remembering that China is the second largest foreign investor in our federal debt, right behind Japan. I guess that's one Chinese import the Trump administration doesn't seem to mind. According to the CBO, this enormous overspending will continue and expand over the next decade, from 21 percent of GDP to 23.4 percent. Revenue as a share of GDP is projected to grow from its current 16.4 percent level to 18 percent in 2030, or $5.75 trillion. But that's not enough to cover the $7.5 trillion the federal government will spend then, hence a projected budget deficit of $1.74 trillion. Because deficits accumulate, it's not surprising that our debt is growing. Debt held by the public will rise from 81 percent of GDP today to above 98 percent by 2030—from $17.2 trillion today to $31.4 trillion then. When you add in the debt that Uncle Sam owes to other accounts within the government, like Social Security, you get a much bigger number...MORE
1 comment:
With all the enormous problems of national debt that this article indicates, there is one small detail that people accept without comment and that is to compare the debt to the GDP. In my ignorance about economic concepts I suggest that it is intentionally misleading for any branch of government to claim that the government spending only represents some small percentage of GDP as if the wealth represented by GDP was money that is available to the government every year. It is not. GDP represents the wealth and productivity of private enterprise. Government contributes nothing to GDP. GDP can be confiscated one time to pay for government excesses and then it ceases to exist.
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