Posted on 10/19/2026 1:13:01 PM PDT by aquila48
The Treasury Department released its August statement of receipts and outlays with all the ceremony the occasion deserved: none. No press conference, no address, just a PDF on a government website, the way a man slips a foreclosure notice under the door. Buried in Table 3 sits a number that would have been a scandal in any saner era: of every dollar Washington expects to collect in income taxes this year, forty-three cents will go to interest on the national debt. Not to pay it down. Just to carry it.
Run the arithmetic; Treasury prints it in plain sight. The full-year estimates call for $2.63 trillion in individual income taxes and $399 billion from corporations. Call it $3 trillion extracted from the productive economy. Against that stands $1.3 trillion in interest. Through August, the ratio ran higher still: nearly forty-five cents on the dollar. The full-year interest estimate exceeds the $914 billion budget estimate for Defense Department military programs. Interest now costs more than the Pentagon. Even after subtracting the interest the government owes itself, the rest still topped defense spending.
''''''' “We Owe It to Ourselves” The standard defense of this arrangement, a staple of mainstream economics since the 1940s, holds that the debt is no burden because “we owe it to ourselves.” Murray Rothbard spent a famous essay, “Repudiating the National Debt,” disposing of that phrase. It makes, he wrote, “an enormous amount of difference” whether, “slicing through the obfuscatory collective nouns,” you are a member of the “we” (the burdened taxpayer) or of the “ourselves” (those living off the proceeds). The bondholder lent Washington money and collects the interest; the taxpayer lent nothing and pays it. The government that borrowed the money is not the public on the hook for it. There is no “we” in Table 3. There are the people who pay, and the people who get paid.
A private borrower pledges his own house; if he cannot pay, his creditors cannot take yours. The state borrows on other terms: it signs the note, you guarantee it, yet the debt is called “ours.” Rothbard followed the logic to its end: repudiation. If the government contracted the debt and the public did not, let the government default, not the taxpayer. It shocks only because it takes the “we” seriously.
(continues at link)
Dear FRiends,
We need your continuing support to keep FR funded. Your donations are our sole source of funding. No sugar daddies, no advertisers, no paid memberships, no commercial sales, no gimmicks, no tax subsidies. No spam, no pop-ups, no ad trackers.
If you enjoy using FR and agree it's a worthwhile endeavor, please consider making a contribution today:
Click here: to donate by Credit Card
Or here: to donate by PayPal
Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794
Thank you very much and God bless you,
Jim
How much longer will this house of cards last?
The adults spent the money they did not have, youngsters will be stuck with the debt.
House collapses when we are no longer able to operate on credit. Don’t know if that is 50% debt to income or 200%.
Nobody can be elected anymore on an austerity platform. My guess is it collapses when we lose our economic or military leverage over the world. Crap on Trump all you want but he is the first president since Reagan working against those two things happening.
Medicare, medicaid, and social security is the trifecta of what is bankrupting the United States.
It is no wonder Gen Z has turned out the way that it has.
They are the most debt ridden as well as the most indoctrinated generation of citizens in American history. <— Not a good combination.
“Unbelievable - 45% of income taxes collected goes to pay interest on the federal debt... and growing each year!
How much longer will this house of cards last?”
____________________________________________________________
Probably another century or so, while competitor nations catch up and pass us economically.
No, it’s “Your grandkids are on the hook”.
MedicareThe House, medicaid the Senate, and social security the President is the trifecta of what is bankrupting the United States.
45% of income taxes collected goes to pay interest
Our national infrastructure is taking the hit. Very little is being spent on it anymore.
It will happen slowly….then all at once.
“We Owe It to Ourselves” Not precisely.
A lot has changed since Rothbard wrote that partially true statement. A good bit of our debt is owed to sovereign bond holders like China, Japan and a large part of Europe. Repudiating the debt would cause far more than a few ripples in international finance.
Russia is the only nation that I can see passing us economically.
If we fall, all of Europe will fall with us. Maybe Poland could survive if they repudiate the Euro.
The coming depression will make the 1930s look like a banquet.
It’s money we owe to ourselves.
So, if someone owes you $40 Trillion you must be rich!
See?
Russia is very far behind the United States. Look at the gdp per capita.
True
But they are not as burdened with debt and their welfare state is not as bloated.
They also have a vast country of unexplored resources not sequestered by a vast Green lobby that works to turn every mineral deposit into a National Monument.
Folks,
Imagine we could pay off all that debt and have no interest. What would the people who have all that cash, do with the money?
Would you like an aspirin?
My 2 cents.
Medicare, Medicaid, Social Security are clearly heavy hitters. National Defense is also, but it is called out in the Constitution and it’s the reason we have a country.
Someone suggested that one only take out of social security, what you put into it. That would be a huge shock to someone who has already taken that money out. Maybe for people who will go on SS.
G.W. Bush recommended that people be allowed the freedom to take some of their SS payments and put it into the stock market. We’re talking about 12.5% compounded! Better late than never?
I put money into Medicare but never took any out. Maybe Medicare disbursements should be capped.
Medicaid should be gradually reduced.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.