How much does the national debt cost us?

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In summary: That represents a per capita increase of $6,100 in government spending above what was taken in.""The federal government spent $1.7 trillion last year more than it brought in... That represents a per capita increase of $6,100 in government spending above what was taken in."
  • #1
moejoe15
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I would like to know how much of my tax dollar goes towards paying interest on the national debt.

Specifically, I suspect that my taxes would go down significantly if we had no debt or interest to pay on it and I would like to know how much.

Everyone talks about lowering taxes yet not one person has mentioned this. If what I suspect is true why isn't every American screaming at our politicians to not just balance the budget but pay off the debt and remove that tax burden from us instead of making it worse every day? Balancing the budget is the tip of the iceberg and the Titanic is still heading towards it.
 
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  • #2
We have something like $15 trillion worth of debt, equal to the entire GDP of the country. Uhm... how do you propose we just pay it off like that?
 
  • #3
Are we counting unfunded liabilities - just saw a report we would need an additional $46Trillion invested at today's Treasury rate to cover the benefits in Social Security and Medicare that have been promised?
 
  • #4
Pengwuino said:
We have something like $15 trillion worth of debt, equal to the entire GDP of the country. Uhm... how do you propose we just pay it off like that?

I didn't propose 'paying it off like that'. I am proposing that we are NOT paying it down and nothing in the new debt deal is paying it down and nothing in any upcoming deal is going to pay it down. I am proposing that the best way to cut our taxes IS to pay it down, not cut social spending. Balancing the budget is putting a bandaid on a sucking wound.

I personally like Ron Paul's ideas. I don't want to kill medicare or social security to do this. [OT moved]
 
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  • #5
moejoe15 said:
I would like to know how much of my tax dollar goes towards paying interest on the national debt.

Specifically, I suspect that my taxes would go down significantly if we had no debt or interest to pay on it and I would like to know how much.

Everyone talks about lowering taxes yet not one person has mentioned this. If what I suspect is true why isn't every American screaming at our politicians to not just balance the budget but pay off the debt and remove that tax burden from us instead of making it worse every day? Balancing the budget is the tip of the iceberg and the Titanic is still heading towards it.

I suspect the answer isn't nearly as simple as you make it sound. Just as a small business owner may borrow money to double the size of his plant, the U.S. may borrow money that ultimately increases production and puts more people to work, increasing revenue. Though it may be relatively easy to calculate how much we've paid in interest on the money we've borrowed, whether we'd be paying lower taxes now if we'd never borrowed the money is a much more difficult question.
 
  • #6
WhoWee said:
On the other hand, they might have bombed us back to the Stoneage - if we didn't Defend ourselves?

Love it. When faced with thoughtful fact, thoughtless rhetoric always trumps.
 
  • #7
moejoe15 said:
I would like to know how much of my tax dollar goes towards paying interest on the national debt.

Specifically, I suspect that my taxes would go down significantly if we had no debt or interest to pay on it and I would like to know how much.

Everyone talks about lowering taxes yet not one person has mentioned this. If what I suspect is true why isn't every American screaming at our politicians to not just balance the budget but pay off the debt and remove that tax burden from us instead of making it worse every day? Balancing the budget is the tip of the iceberg and the Titanic is still heading towards it.

$412 bilion. http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

Not a bad deal, really. You can run three major and several minor wars, promise everyone great retirement and medical benefits, and never have to pay for any of it. And the Fed has just announced it's going to keep real interest rates effectively at zero for the next two years. And they can print all the dollars the government needs. What's not to like?
 
  • #8
WhoWee said:
Are we counting unfunded liabilities - just saw a report we would need an additional $46Trillion invested at today's Treasury rate to cover the benefits in Social Security and Medicare that have been promised?

Over what, the next fifty years?
 
  • #9
Ivan Seeking said:
Over what, the next fifty years?

:smile:Well now, if we can talk about spending cuts over 10 to 12 years - why shouldn't we talk about unfunded liabilities over the long term - the unfunded amount now is less than the unfunded amount later (if we don't address the issue currently).

http://www.washingtontimes.com/news/2011/apr/28/coats-the-way-out-of-debt-and-to-tax-reform/
"The federal government spent $1.7 trillion last year more than it brought in tax revenue. It had to borrow that amount. This increased the outstanding public debt to $14.2 trillion - or 96 percent of GDP. This includes that part owned by the Social Security trust fund and the Federal Reserve, but does not include the unfunded liabilities of Medicare, Medicaid and Social Security, which will add an additional $46 trillion to the deficit in present-value terms over the next 75 years.

This is not sustainable. Without spending cuts and/or tax increases, this amount will not only continue growing without end but will increase as a share of GDP until bondholders no longer trust the governments ability to pay the interest required. At that point, they will dump U.S. Treasuries."


--------------

Another view:
http://forwhatisright.com/2011/02/23/the-crucial-importance-of-entitlement-reform/
"It is important to understand that the Federal government reports only a tiny portion of actual debt when evaluating its fiscal position. As it is, the government reports a measure known as Total Public Debt Outstanding, which consists of debt held by non-U.S. government actors (including other countries) and intra-governmental holdings (debt incurred by borrowing from the trust funds that provide for entitlements). This number stands at $14.13 trillion as of February 16, 2011.[2] Currently, the numbers break down to $9.5 trillion owed to individuals and foreign nations, and $4.6 trillion that the government owes itself to fund entitlements. Assuming Obamacare assumptions are valid, the debt is predicted to balloon to $18 trillion by 2021.[3]

As noted, this is a small part of what is actually needed to meet Federal obligations. The various entitlement programs are all expected to exhaust their trust funds as obligations increase. In fact, total present value of these unfunded future social insurance obligations is approximately $46 trillion.[4] That is, this is the total amount that would have to be set aside now to pay for these programs in the future. This is in addition to the taxes currently used to fill the programs’ trust funds, such as the FICA tax and Medicare tax withheld from paychecks. This means that these programs would have to be funded with new taxes and borrowing. When added to the current debt explicitly held by the government, total liabilities approach $62 trillion.[5] Put in perspective, this is over $200,000 in debt owed by every American."
 
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  • #10
WhoWee said:
:smile:Well now, if we can talk about spending cuts over 10 to 12 years - why shouldn't we talk about unfunded liabilities over the long term - the unfunded amount now is less than the unfunded amount later (if we don't address the issue currently).

Talking about unfunded liabilities, what is the figure for US military commitments?

I don't mean just the military pension schemes that are about 5.4% of Federal debt but the future cost of various invasions and adventures to be expected over the next decade or so?
 
  • #11
apeiron said:
Talking about unfunded liabilities, what is the figure for US military commitments?

I don't mean just the military pension schemes that are about 5.4% of Federal debt but the future cost of various invasions and adventures to be expected over the next decade or so?

My personal crystal ball isn't working - can't even figure out how much President Obama is spending in Africa currently or the future cost of US "contractors" after the big troop pull-out?
 
  • #12
I hope that this is not too far off topic.

Can anyone direct me to the actual text of the debt limit bill that was passed and signed earlier this month? I can't figure out exactly what they have done from news sources so I guess I am going to have to read it.

Thanks, Skippy

PS I tried http://en.wikipedia.org/wiki/Budget_Control_Act_of_2011 which had links to the bill that returned messages "document not available".

PPS Nevermind. http://www.gpo.gov/fdsys/pkg/BILLS-112s365eah/pdf/BILLS-112s365eah.pdf
 
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  • #13
This thread makes me lol. It's strawman vs. ad hominem in an epic war to the death!
 
  • #14
moejoe15 said:
I personally like Ron Paul's ideas. I don't want to kill medicare or social security to do this.
Maybe you don't but Paul does.
"[URL the Welfare/Warfare State
[/URL]
 
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  • #15
moejoe15 said:
You don't like me calling it offense? Was Viet Nam defensive? Was Nicaragua defensive? Is Iraq defensive? Is Afghanistan still defensive? Was Grenada defensive? Was Korea defensive? Other than a few rag heads attacking us, no country has attacked us since WWII. I must be forgetting something, maybe you can refresh my memory on which country it was that attacked us thus activating our 'defenses'.

Here is a list of our military 'interventions' which you would also call defensive I suppose:

http://en.wikipedia.org/wiki/US_Wars

Pretty darn active for defense isn't it?

I think it might be best if a veteran of one of these conflicts responds to you.
 
  • #16
Char. Limit said:
This thread makes me lol. It's strawman vs. ad hominem in an epic war to the death!
And for all the bickering, no one has yet answered the OP's question!
 
  • #17
RudedawgCDN said:
Which is great - I mean really as a Canadian I hope you guys spend yourselfs into poverity, it certainly makes my trips down to the US cheaper as your dollar tanks. My home is worth twice as much as it's US counterpart.

Better hope not. Canada and the rest of the world economy will go down with the ship.
 
  • #18
russ_watters said:
And for all the bickering, no one has yet answered the OP's question!
Good point.

CBO said:
...The amounts of net interest shown in the budget include interest paid on all Treasury securities ($413 billion in 2010), minus the portion of that interest that is received by trust funds ($186 billion in 2010) and the net amount of other interest received by the government ($30 billion in 2010).
That is, the federal government pays itself $216B in interest and $197B of 'net' interest outside the government, i.e. to the US public, Chinese, etc.
http://www.cbo.gov/doc.cfm?index=11999

On the current spending plan the net interest will increase to ~$800B by 2020.
 
  • #19
mheslep said:
On the current spending plan the net interest will increase to ~$800B by 2020.

I'll assume current interest rates are projected?
 
  • #20
WhoWee said:
I'll assume current interest rates are projected?
No,a slow return to historical.
 
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  • #21
This IRS link provides the number of tax returns filed.
http://www.irs.gov/taxstats/article/0,,id=102886,00.html

[URL]http://www.irs.gov/taxstats/article/0,,id=102886,00.html[/URL]

The fair way to assign a cost to all tax filers - even if it means reducing EITC redistribution - IMO.

It's also worth mentioning the 383,000 non-profits might be capable of paying a special licensing (national debt reduction) fee - based on revenues and G&A perhaps?
 
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  • #23
mheslep said:
Good point.

That is, the federal government pays itself $216B in interest and $197B of 'net' interest outside the government, i.e. to the US public, Chinese, etc.
http://www.cbo.gov/doc.cfm?index=11999

On the current spending plan the net interest will increase to ~$800B by 2020.
That ain't it either. The OP asked in terms of per dollar in taxes. The wiki on the debt, says it is 9.5 cents, which appears to include "entitlements".

The reason I find the OP's question intriguing is because it can be used to directly predict a tax savings; ie, for a person who pays $10,000 a year in income and payroll taxes, cutting the debt in half would enable reducing their taxes by $450/year.
 

Related to How much does the national debt cost us?

1. How is the national debt calculated?

The national debt is calculated by adding up all of the outstanding debt that the government owes, including money borrowed from individuals, other countries, and government agencies.

2. How much is the national debt?

As of 2021, the national debt of the United States is over $28 trillion.

3. How is the national debt affecting the economy?

The national debt can have both positive and negative effects on the economy. On one hand, high levels of debt can lead to higher interest rates and inflation, making it more expensive for individuals and businesses to borrow money. On the other hand, government spending fueled by debt can stimulate economic growth.

4. Who owns the national debt?

A large portion of the national debt is owned by the federal government itself, in the form of trust funds and other government agencies. The remaining debt is primarily held by individuals, banks, and foreign countries.

5. Can the national debt ever be fully paid off?

Technically, yes, the national debt can be paid off. However, it would require significant changes in government spending and taxation, as well as a strong economy to generate enough revenue to pay off the debt. Additionally, some argue that a certain level of debt is necessary for a healthy economy.

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