Our National Debt
Its Consequences
and
What We Can Do
About It
As of June 3, 2013, the
official debt of the United
States government is
$16.7 trillion
($16,738,788,832,145)
So What?
This amounts to:
•
• $53,009 for every person living in the U.S.
• $138,241 for every household in the U.S.
• 105% of the U.S. gross domestic product.
• 565% of annual federal revenues.
Is the Debt Growing?
• The National Debt increases an
average of
$2.62 billion per day
since September 30, 2012!
(that’s $110 million per hour)
But, News Flash!!!
Our Government
occasionally lies
(or attempts to
shade the truth)
Tricky Accounting
Publicly traded companies are legally required
to account for "explicit" and "implicit" future
obligations such as employee pensions and
retirement benefits. The federal budget, which
is the "federal government's primary financial
planning and control tool,”
is Not Bound by this rule
Gross U.S. Debt
The gross debt has two components:
1) Debt held by the public -- money the
government borrows on the open market
from domestic or foreign investors; and
2) Intra-governmental debt -- money the
government owes itself, as in the Social Security
trust fund
The True National Debt
• So, in truth, the “real” and
total national debt is
considerably higher than what
you see reported:
At the close of the federal government's 2012
fiscal year (September 30, 2012), the federal
government had roughly:
1) $7.5 trillion ($7,517,000,000,000)
in liabilities that are not accounted
for in the national debt, such as
federal employee retirement
benefits, accounts payable, and
environmental/disposal liabilities
And,
2) $21.6 trillion ($21,622,000,000,000) in
obligations for current Social Security
participants above and beyond projected
revenues from their payroll and benefit taxes,
certain transfers from the general fund of the
U.S. Treasury, and assets of the Social Security
trust fund.
And,
3) $27.0 trillion ($27,000,000,000,000)
in obligations for current Medicare
participants above and beyond
projected revenues from their payroll
taxes, benefit taxes, premium
payments, and assets of the Medicare
trust fund.
•
So, the TRUTH
• Combining the figures above with the
national debt and subtracting the value
of federal assets, the federal government
had about $67.7 trillion
($67,726,000,000,000) in debts,
liabilities, and unfinanced obligations for
current Social Security and Medicare
participants at the close of its 2012 fiscal
year
Thus,……….
This shortfall equates to:
• $215,311 for every person living
• $559,331 for every household
• 428% of the U.S. gross domestic
product.
• 2,513% of annual federal revenues.
•
Table from the Previous Graph
•
•
•
•
•
•
Portion of Total Federal Spending Category
1960 1970 1980 1990 2000 2010
Social Spending 23% 35% 47% 45% 56% 61%
Defense
56% 44% 28% 27% 20% 22%
Debt Service
14% 12% 16% 21% 18% 11%
Economic Affairs 7% 9% 8% 5% 6% 4%
Public Safety
0% 0% 1% 1% 1% 2%
Tax Distribution
What You Really Pay in Taxes
•
•
•
•
•
•
•
•
Personal Income Tax
State and Local Income Tax
Sales Tax
FICA
Corp. Income Tax Share
Property Tax
Fuel Taxes
Other
• TOTAL:
18.2%
10.6%
10.3%
7.65%
3.00%
2.7%
.6%
7.00%
60.05%
Politics
• The U.S. Constitution vests
Congress with the powers to tax,
spend, and pay the debts of the
federal government. Legislation
to carry out these functions must
either be:
• 1) passed by majorities in both houses of
Congress and approved by the President; or
• 2) passed by majorities in both houses of
Congress, vetoed by the President, and then
passed by two-thirds of both houses of
Congress; or
• 3) passed by majorities in both houses of
Congress and left unaddressed by the
President for ten days.
Debt owed to non-federal entities
Ownership of U.S. government debt by foreign creditors:
Table of Previous Graph:
• Country
•
•
•
•
•
•
•
•
•
China
Japan
United Kingdom
Oil Exporters
Brazil
Caribbean Banking
Taiwan
Russia
Hong Kong
Amount (billions)
$1,154.7
$885.9
$278.4
$215.5
$197.6
$166.5
$157.2
$139.3
$128.1
Who?
• Oil exporters include Ecuador, Venezuela,
Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman,
Qatar, Saudi Arabia, the United Arab Emirates,
Algeria, Gabon, Libya, and Nigeria
• Caribbean Banking Centers include the
Bahamas, Bermuda, Cayman Islands,
Netherlands Antilles, Panama, and British
Virgin Islands
Debt Owed to Federal Entities:
Table from Graph:
•
•
•
•
•
•
•
•
•
Amount (billions) Portion of Total
$2,607
56%
Social Security
Civil Service
Retirement/Disability $767
Medicare
$337
Military Retirement
$333
DOD Retiree Healthcare $160
USPS Retiree HB
$43
Other
$372
17%
7%
7%
3%
1%
8%
Outlays
Big Cutting:
The Consequences:
•
•
•
•
•
More Debt Means Higher Interest Rates
More Debt Means Fewer Jobs:
More Debt Can Erode Your Life Savings:
More Debt Makes Your Family Less Secure:
More Debt Puts Your Health Care At Risk:
Our Task: (or, What Can We Do?)
• Cut Waste
• Cut Government Size
(The government is doing things it should not be doing and
spending far more than we can afford to pay or should be paying. It is time to start moving decisively toward a federal
government that is limited and carries out its appropriate function)
• Get Rid of Duplicate and
Unnecessary Programs
• Slash Entitlements
How Can We Do This?
• We work and fight to elect conservative,
fiscally responsible candidates
• We un-elect spendthrift idiots
• Repeal Obamacare
• Balance the Budget
• Revise the Tax Code (Simple and Fair)
• Reduce Government Size (to only perform
what the Constitution authorizes)
‘Saving The Dream ‘
This plan is the most
comprehensive and
well thought out
program for:
What it Proposes
•
•
•
•
•
Elimination of the National Debt
A Balanced Budget (10 years)
A Fair Tax System
Government Assistance only to the Needy
Government Reduced to Constitutionally
Authorized Powers
• More (revised Health Care Program)
What YOU and We can Do
• Go to:
http://www.heritage.org
• Sign up for “Morning
Bell”
And,
• Download, embrace and promote:
“Saving the Dream”