# JaysRage (93.90)

## JaysRage's CAPS Blog

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April 22, 2011 – Comments (4) | RELATED TICKERS: TLT , IEF , SHY

Debt -- How much you currently owe.

Deficit = How much more you spend in a year than you take in.

The current national debt stands at roughly 14.2 trillion dollars.

The projected U.S. GDP for the 2011 year is 15.2 trillion dollars.

The current budget proposal for 2011 is roughly 3.8 trillion.

The proposed budget deficit for the year 2011 is 1.5 Trillion

which means that the current revenue of the U.S.  government is roughly 2.3 Trillion

This means that the government proposes to spend 66% more than it take in for 2011.

In fact, no year in the president's 5 year budget proposal proposes a surplus.  That means after 5 years of changes, the president still cannot conceive a year where the government can spend the same amount of money it takes in or less.

At the end of the 2011 year, the U.S. government will owe money equivalent to the the entire GDP of the country and it will owe 6.6X the current revenue that the government takes in.

For comparison sake, let's say that this is a person that we are talking about.   Let's say that this person makes \$50,000 a year.    That person already owes \$308,000.   They intend to spend about \$82,608 this year, increasing their total debt to \$330,000 by the end of the year.    Interest on the debt will be \$11,500 per year.  That means that 23% of the person's income is going to be devoted to paying interest on the debt (at current debt prices), and obviously that number is just going to increase as the debt increases.

Do you want to be a holder of that debt at 3.5% annually?   What if that person has the power to decide to only pay you \$.80 on the dollar or \$.60 on the dollar (remember that you are only getting 3.5% interest on the debt).

#1) On April 22, 2011 at 1:17 PM, Jbay76 (< 20) wrote:

So, this person then takes to robbing others to try and make more \$\$ or get rid of its debt holders...i.e war with Iraq, Libya, Iran etc...

scary times in front and ahead

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#2) On April 22, 2011 at 1:52 PM, JaysRage (93.90) wrote:

Literally, the changes that should be made are staggering.   Doubling taxes, upping social security and medicare eligibility by 3-5 years, ending the wars in progress, slashing and burning discretionary government spending.   Those types of things.   The tiny changes that are being proposed are a drop in the bucket.   SOMEONE should be proposing a budget surplus this year.   I know it won't happen.  We went from debt being 60% of GDP to 100% of GDP in three years.

http://www.bloomberg.com/news/2010-08-11/u-s-is-bankrupt-and-we-don-t-even-know-commentary-by-laurence-kotlikoff.html

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#3) On April 22, 2011 at 2:24 PM, CluckChicken (49.71) wrote:

I would find it very interesting if somebody did propose a budget with a surplus for the next budget, would be interesting to see if they are even remotely realistic.We all know that the tax system needs to change. My personal tax rate is significantly lower than several of my friends and I make far more than they do, this makes no sense to me. I would be in favor of a flat tax rate as long as it taxes all income the same and we dump the loopholes. As well as doing the same for corporate taxes.We also need to take a look at what the government spends it's money on. Defense obviously has to take a major cut, there is no justifiable reason we spend more than the rest of the world does combined. Some areas will have to become far more efficient, other areas will just have to go.

Other things will have to happen too but this would be a good start.

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#4) On April 22, 2011 at 2:36 PM, davejh23 (< 20) wrote:

\$14.2 trillion?  No problem...lets break it up into easy installments of \$100 million...about \$1 per household.  See?...that's only 142K easy installments.  Surely each household can afford \$1 a day...for 389 years.  Oh wait, that doesn't include interest...let's make it \$5 a day...adjustable rate subject to change without notice.

I wouldn't even hold short term debt for 3.5%...maybe 13.5%.

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