I'm not an economist, so I look to others to help me understand the nation's economic problems. Feel free to respond with other viewpoints.... (I hope this isn't too long for Major Bean)
What Does The $1.75 Trillion Deficit Mean for You and Me?
President Obama recently presented a new federal budget plan to Congress that was a whopping $3.55 trillion (That’s $3,550,000,000,000!) dollars. The plan calls for increased spending for most federal agencies and programs, as well as some new budget priorities. There’s a specific layout of the budget available online at [url=http://www.budget.gov" onclick="window.open(this.href);return false;]www.budget.gov[/url]. But what does this $1.75 Trillion budget deficit mean for us as consumers? It turns out, really not all that much.
Currently the US Federal Government has about $10.8 trillion dollars in debt, of which they pay approximately $350 billion in interest each year on. This means that $350 billion in paid-in tax dollars is not used to provide services for American citizens, but rather to pay interest on the national debt. An increase of $1.75 trillion to that amount would mean that there will be an additional $56 billion per year of tax-payer money would be going toward interest payments rather than toward providing for the nation’s defense, funding entitlement programs, and funding various social programs that the government has.
Since the government brings in approximately $2to $2.5 trillion per year depending on economic conditions from taxes. This $56 billion per year will now represent 2-3% of the total amount of revenue that the government has each year. Does that mean that $56 billion will be provided less in services to Americans? Probably not. Instead, the government will likely either increase taxes or borrow even more money to provide for these additional programs.
Although the $1.7 trillion dollar budget deficit is the biggest it has ever been in the history of our nation, it still only represents 12% of the gross domestic product. This number is higher than economists would like, but it’s still less than what many other developed nations are borrowing as a percentage of GDP.
The deficit, scares the heck out of me...what happens when we are at the end..nothing can be done, its over...all the while these goons in Washington play with our money...if they ran their personal household finances like they do in office, they would go to jail for check fraud, passing bad checks. Stop the spending on both sides!
And right now with the US borrowing money at 1-2%, it isn't as bad as it could get. Greece and other Euro countries are borrowing at 9%. At that point that 350 billion in interest becomes 3 trillion in interest. So we would be paying more to service the debt than the actual tax receipts. Scary scenario.
Thomas Sowell: There are no solutions, just trade-offs.
You need to address that remark directly to Kresspin, because it seems to be falling on deaf ears.
It seems to Kresspin that the impact is NOT THAT MUCH!!! Wow!!!
It's kind of like the Unemployment figures. They tell us that it is now below 9% but the truth is that it is closer to 20% if you factor in those who have given up looking for work, and those on the continued unemployment compensation.
Considering the tax capacity of a healthy economy and country is around 20% of GDP, a deficit of 12% is HUGE. That means our deficit for one year is 60% of our total healthy tax capacity!!!
Too bad future generations aren't here to see all the great things we are spending their $$ on!!
I don't think many folks even understand just where we are at with the financial condition of this country- I've tried to explain what's about to happen to our standard of living, and just how hard things could get for us.
There's a guy who goes into pretty good detail about our condition-
EVERYONE should take the time to watch this presentation.
I find it to be a realistic appraisal of what we are up against. This is what the deficit really means......
Nmysys wrote: It's kind of like the Unemployment figures. They tell us that it is now below 9% but the truth is that it is closer to 20% if you factor in those who have given up looking for work, and those on the continued unemployment compensation.
And if the Republicans/Tea Party have their way and shut down whole federal agencies... imagine what it will go up to then?
Nmysys wrote: It's kind of like the Unemployment figures. They tell us that it is now below 9% but the truth is that it is closer to 20% if you factor in those who have given up looking for work, and those on the continued unemployment compensation.
And if the Republicans/Tea Party have their way and shut down whole federal agencies... imagine what it will go up to then?
People might have to find productive jobs that actually create wealth instead of pushing paper around at the department of education or energy?
Thomas Sowell: There are no solutions, just trade-offs.
