We have often warned that the skyrocketing Federal government national debt is eventually going to crash our economy, our financial stability, and our democracy if the situation is not gotten under control and under control quickly. Today’s post is going to review the statistics and dangers of the national debt and why the Washington politicians have to take some serious budget actions and reductions soon or the whole house of cards of our financial system and economic stability is going to go over the fiscal cliff.
Some Federal budget statistics in no particular order that should scare the hell out of you:
If you had spent $1,000,000 a day from the day that Christ was born, you still would not have spent a trillion dollars.
Spending a million dollars a day over the past two centuries or so would take you to about $750 billion.
The Federal government national debt is currently about $36 trillion.
Thus, the current national debt is about 50 times larger than the amount of money you would have spent if you had spent $1,00,000 a day since Chrisst was born.
There are about 154,000,000 Federal tax returns filed every year.
Thus, on average each of those taxpayers would have to pay about $234,000 each to pay off the national debt.
Given there are about 340 million Americans living in the country today, each man, woman and child would have to pay out about $106,000 each to pay off the national debt.
A family of four then would have to pony up about $424,000 to pay off the national debt.
If you think that “taxing the rich” more would pay off the debt you are absurdly wrong.
According to Forbes magazine, as of late 2024, Elon Musk was the richest American with an estimated wealth of $244 billion.
Even if you taxed his wealth at 100%, his $244 billion would pay off less than .7% of the national debt, not 7%, .7%.
If you only took 10% of his wealth you would pay off only .07%.
If you taxed the wealth of the ten wealthiest people in the country at 100% and applied it against the national debt you would pay off only about 4.3% of the debt.
If you only took 10% of their wealth, you would pay off only .43% of the national debt.
And finally, according to Forbes, the total wealth of the 400 wealthiest Americans comes out to about $5.4 trillion, which if you confiscated all of it and applied it to the national debt, you would pay off less than 15% of the debt.
Thus, taxing the rich more makes no sense since even if you took ALL of their wealth and applied it to paying down the debt, you would only pay off a very small portion of the $36 trillion on the books.
Oh, and by the way, this $36 trillion doesn't include the over $80 trillion (source: Congressional Budget Office) in unfunded government liabilities for Social Security and Medicare’s budgets that are going to be needed over the next 75 years.
To meet those unfunded liabilities, the Federal government would need to collect, on average, an additional $1.07 trillion a year for 75 years to keep Social Security and Medicare solvent under the current assumptions and parameters of the programs.
But in 2024 the Federal government only collected $4.92 trillion in tax revenue which means to cover the additional $1.07 trillion a year it would have to raise taxes by about 22%.
However, of that $4.92 trillion collected, about $1.107 trillion of that was spent on defense and $1.124 trillion was spent SOLELY to pay the interest on the national debt (Source: Wall Street Journal article, February 22, 2025.)
Thus, about 45% of the Federal government’s revenue stream was spent on only two budget lines, interest payments on the debt and defense before any other government expense was considered..
In theory, if the Washington political class had been operating on a balanced budget over time, then there would not be $1.124 trillion being paid out of taxpayer taxes every year to service the national debt which means that on average, every one of the 154 million taxpayers would have an additional $7,300 in their bank accounts every year, $7,300 that wasn't going to fund interest payments on the ever escalating national debt..
But the Biden administration spent $6.75 trillion in fiscal 2024, adding a whopping $1.83 trillion to the national debt.
Thus, in fiscal 2024 the Federal government under Biden collected more in taxes than any government entity in the history of mankind and still overspent it by 37%, indicating he and the rest of Congress never had an intention of getting Federal spending under control.
Given the over spending by $1.83 trillion and about 154 million taxpayers, on average each taxpayer would have saved about $11,800 in taxes if Washignton had just spent what it had collected in taxes.
Since the national debt in 2024 was about $36 trillion and the GDP of the entire country was about $29 trillion (GDP - value of all goods and services produced in the economy in a year), even if every dollar of the GDP was used to pay down the national debt we would still be looking at $7 trillion of debt.
With the exception of the covid years, the debt to GDP ratio has never been higher, 1.24% in fiscal 2024.
Going back to the Wall Street Journal article cited above, written by Niall Ferguson, he analyzed the historical relationship between defense spending and national debt/interest payments and concludes that once defense spending falls below debt servicing costs, like it did for the first time for this country in 2024, the decline of all great historic powers begins.
In the face of these dire statistics and situation, Washington folks have been busy spending billions and billions of dollars on the following nonsense:
$20 billion for a Sesame Street play in IRAQ.
$4.5 million to “combat misinformation is Kazakhstan”
$3.9 million for “LGBT causes in the western BALKANS
$6.0 million for tourism in EGYPT
$2 million to fund sex change operations in GUATEMALA
Billions more for similarly inane and corrupt projects
If you are upset because Trump and Musk are shutting down government functions like these listed here but are ignoring the real threat to this country, the national debt and out of control Federal government spending, then you and I have different priorities. And while I respect your right to have a different view and different priorities, I am going to continue to construct my parachute because when the Federal government and the country shortly and likely go over that fiscal cliff, I want to be ready and not go splat on the fiscal cliff canyon floor.
**********************
If you agree that we need to deseat every member of Congress for their lack of success and accomplishment, then please consider going to the following petition link to help the cause:
https://www.change.org/p/deseat-congress-reset-freedom
**********************
No comments:
Post a Comment