Unfortunately, we have all been reminded in the past three years how poor U.S. Government policies can negatively affect our wallets. We pay a lot more today for things we need to survive – food, clothing, gasoline, electricity, and everything else.
We aren’t economists but we are aware of the current events and know that this price increase is due to inflation. To put it nicely, we also know that the misguided policies of the government are responsible for this record-breaking inflation. We tend to forget how government policies can affect our lives positively or negatively when times are good. When we experience a period like the current high inflation rate, we are reminded of this painful truth.
Even though our current inflation crisis is painful, another situation far worse awaits us. This will make the current hardships we face seem like we’re living in Easy Street if it is not addressed. This is also a government-driven phenomenon, just like inflation. This is different in that it will be impossible to trace the roots of this problem to any one president or political party. The problem has been growing for years, both when Democrats and Republicans were in power in Washington D.C..
What is the potential problem that grows silently and threatens to overwhelm us? Our national debt. It’s like a silent cancer eating away at the country. I deliberately chose to compare the debt we owe to this terrible disease because I’ve personally battled it twice. By the grace of God, and thanks to some amazing doctors, I’m still here.
Cancer can be present in our bodies unknowingly for a long time. It is possible for a person to go through their day as usual until they feel that something is wrong. Then they decide to consult a doctor. As I was fortunate to have experienced, the doctor can implement a treatment plan that will save the patient’s life. The treatment usually involves removing the tumor, killing the cancerous cell or a combination of both. Even though the solutions to the problem can be unpleasant, it is better than doing nothing.
Our national debt was a “silently increasing disease” that reached over $32 trillion with no signs of anything wrong until recently. As people who have a chronic disease will eventually recognize the warning signs, so too do we now see that there is something wrong with our national debt. Let’s look at the impact of debt on you and your family to illustrate this point.
The Congressional Budget Office (CBO), in early September, released its latest projections on the U.S. budget deficits over the next few years. In their projections for 2024, I was particularly interested in the figure of $993 billion that they projected we would pay next year as interest on our debt. As I read this, I was struck by the fact that a large portion of this money would go to foreign nations that hold a substantial amount of our debt. I began to wonder how much this would cost every American taxpayer next year.
A Pew Research report released in April of 2023 revealed that approximately 112 million tax returns would have some form of taxable income. I was able to learn this from a Pew Research Study. The Pew study suggested that 112 million people were taxpayers, so I used this number. From there, it was simple to calculate.
Divide $993 billion by 112 million taxpayers and you get the following: The average share of interest on debt next year for each taxpayer will be $8866. Take a moment to absorb that. Next year, the government will spend $8.866 per taxpayer on interest. This money will not only not be used to pay off the debt but CBO estimates that the government will also add an additional $1.6 trillion in debt. The amount of interest paid by each taxpayer is likely to increase the next year, and every year thereafter, possibly significantly, unless the government stops running up debt.
You get the idea, even though we use an average that will, by definition apply differently to every taxpayer. Imagine that if there was no federal debt you and your family would have almost $8,900 to keep in your pockets next year. There would be no interest payments. Wouldn’t it make a difference to your life if you had less money, like $4,000 or $2,000? Most people would say YES to this question!
CBO and other government accounting agencies often state that the current budget trajectory of our country is “unsustainable”. Even our government admits we are living on borrowed time and money unless we take action and force our politicians into limiting spending. We are always circulating information and ideas about how we can hold politicians accountable and tackle this problem. Visit JoeFromTexas.com for more information on how you can help us.