Posted on 02/15/2024 10:01:14 AM PST by SeekAndFind
The deficit, in this discussion, is an annual number. It is the amount that tax revenues are less than spending by Congress. In other words, Congress is spending six-plus percent more each year than the government can cover by taxing citizens.
Economist Brain Wesbury on the deficit and debt:
Last week the Congressional Budget Office set out new projections for budget deficits and debt in the decade ahead, and they weren’t quite as bad as they looked last year. The CBO now projects a deficit of 6.4% of GDP in 2033 versus a prior forecast of 7.3%. Total accumulated debt by 2033 is now forecasted to be 114% of GDP versus 119%. None of this is “good” news — deficits and debt would still be too high — but it is “less bad.”
The 6% shortfall is covered by debt, through issuance of Treasury bonds. That debt costs money, too: last year, America’s debt costs were $750 billion. That interest cost is added to the overall debt, thereby compounding the cost of spending. It is called monetizing the debt. It means you are on the hook. Did you get much benefit from your debt? Did you ever agree to pay back $34 trillion in debt? I didn’t think so.
One might think that a 6% annual deficit (yearly shortfall) isn’t much — until it’s compounded over years and decades. Congress has overspent for most of the last century. Our total debt, which accrues to every America citizen today and future citizens, is more than $34 trillion.
By 2033, the annual cost of that debt will exceed 116% of revenues. How long can you go on spending 16% more than you make before the lender stops lending? The nations that buy our national debt, our Treasuries, are the lenders.
(Excerpt) Read more at americanthinker.com ...
Further, we citizens cannot sustain this burden of debt. Nobody can.
We need a national sales tax that everyone pays. Tax income and the non-affected don’t suffer and continue to vote for the free spenders. Tax everyone and voters will look for good stewards who will keep deficits and taxes low.
Calculated on revenue, the deficit was 38%. Calculated on total spending, the deficit was 28%.
Thus, contrary to Mr. Davidson, there is not a "6% annual deficit (yearly shortfall)." Rather, of federal spending there was in 2023 a 28% shortfall.
Calculating the deficit on the basis of GDP (Gross Domestic Product) is not a very useful number.
My brilliant lefty Economics professor explained to me why the national debt does not matter decades ago:
“We owe it to ourselves.”
Omg.
My understanding is that we bring in about 4.5 trillion and spend about 6.5 trillion each year. That’s an awful lot more than 6% borrowing. It’s about 33% borrowed.
and an import tariff.
How long can you go on spending 16% more than you make before the lender stops lending? The nations that buy our national debt, our Treasuries, are the lenders.
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Even if individuals and other nations refused to buy Treasury Bonds, the Federal Reserve could (and would) buy them. They could buy every last one of them. And they could do it indefinitely into the future. The only significant concern would be the inflationary effect. This all became a reality when we hitched our wagons to a Central Bank based on pure fiat currency.
BTTT!
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