Liberty on Tap since 1984
55,654 Years?
I wrote earlier this year about the mounting US Debt when we crossed the $13 Trillion Mark. At the time of this writing, our National Debt has Increased to $13.4 Trillion.
This total does not include the unfunded liabilities of Social Security and Medicare to name a few. This time, I am taking a different approach and would like to share this with you.
For simplicity, let's assume that an individual makes $1 Million Dollars per Day (Yes, Per Day) and pays 34% in Federal & State Income Taxes. This would leave the individual with Net Income after Taxes of $240,900,000 Per Year. If this individual were able to apply for a Loan with an Interest Rate of 0%, it would take 55,654 YEARS to fully pay the loan. Please see the attached PDF File for the details of this transaction.
This is astronomical to me! To put it in another perspective, this is a total of 20,313,623 Days with an Income of $1,000,000 Per Day!
I do not know what it will take for us to "wake up" and discover that we cannot continue at such a pace with our Budget Deficits. I am a Firm Believer that raising taxes is NOT the Solution. I have been a Chief Financial Officer for twenty-one (21) years and I have seen how individuals and businesses respond to tax increases. There comes a point when the "People being Taxed" decide to stop investing in their businesses, not working those extra hours, and other productive activities due to the "tax bite" being so severe.
I hope this sheds some light on what is happening in Washington and We Will Ultimately be Responsible to Pay the Bill.
Views: 0
Tags: Debt, Deficits, Economy, Government, Taxes
Comment
-
Comment by Marcotte Anderson on September 3, 2010 at 12:06pm -
Sounds good Kevin. I too have to get a lot of work done today. Cheers. :)
-
Comment by Kevin R Mullins on September 3, 2010 at 12:01pm -
I will comment later on your questions. Unfortunately, I am at work today and have a busy day ahead of me. I appreciate your feedback and will respond to your questions this evening or early tomorrow morning.
I have my thoughts collected but it will take some time to add the graphics that I would like to display.
-
Comment by Marcotte Anderson on September 3, 2010 at 11:38am
-
I used an individual in the analysis to put this in perspective.
But that's a disingenuous perspective. You're putting the weight of the entire debt on one individual, when in fact it is shared by all.
Don't get me wrong, I agree with you that the debt is an albatross around our necks and needs to be addressed (we probably differ on how). I just think your literary device is inappropriate and/or misleading.
-
Comment by Marcotte Anderson on September 3, 2010 at 11:34am
-
History has proven that a Government cannot spend itself into prosperity. Prosperity must come from the Private Sector.
What's your take on 1936-1945 then? There we had a dramatic increase in public spending coinciding with the end of the Great Depression and an era of prosperity in the 1950s.
If the Post Office and Amtrak (which are both run by the Government, were profitable or even budget neutral), my opinion would be different
What about Conrail? The federal government turned it into a profitable company and it returned to the private sector.
Also, any thoughts on my Supply Side Theory argument? I think there must be a flaw in it, or there wouldn't be so much debate among economists, but I just don't see it. Can you shed any light on it from a business' perspective. How does cutting corporate tax lead to more jobs?
-
Comment by Kevin R Mullins on September 3, 2010 at 11:28am
-
I used an individual in the analysis to put this in perspective. I did not intend to use a "scare tactic". In addition, the $12 Billion Dollars per day that our Government received in Revenue is not adequate to cover the Expenses per day or we would not be having Deficits.
The deficit does not include the unfunded liabilities that we owe for Medicare and Social Security. To me, the most concerning element is seeing our Entitlement Spending becoming such as large percentage of Total Government Expenditures.
History has proven that a Government cannot spend itself into prosperity. Prosperity must come from the Private Sector. If the Post Office and Amtrak (which are both run by the Government, were profitable or even budget neutral), my opinion would be different.
In closing, if our Founders believed that the Government was the Solution to all of the Problems, I do not feel we would have a Republic and the Constitution would have included a heavy provision for taxes to make everyone equal.
-
Comment by Marcotte Anderson on September 3, 2010 at 10:44am
-
$1 Million Dollars per Day (Yes, Per Day)
Of course, US Government revenues are actually $12 Billion per day (yes, Billion Per Day), so your 55k year calculation is more of a scare tactic than a meaningful number. It's off by 4 orders of magnitude.
That said, we do have to balance the budget. I just don't think we want to drastically cut spending or drastically raise taxes in the middle of a recession. Once we get out of it, then we should do a combination of both.
I have been a Chief Financial Officer for twenty-one (21) years and I have seen how individuals and businesses respond to tax increases.
The flaw I see in the generic Supply Side theory argument (i.e. lower taxes so businesses and [rich] individuals invest more, thus creating jobs) is this. If I'm running a company, and all of the sudden my corporate income tax goes away (or lowers dramatically), I don't hire more people. What causes me to hire more people is an increase in sales or output. Similarly, if I as an individual start paying less capital gains or income tax, I may go out and buy more stock, but the purchase and sale of a company's stocks doesn't give it any more cash with which to invest (IPOs being the obvious and rare exception).
How do you respond to those arguments?
© 2013 Created by Freedom Pub.
You need to be a member of Freedom Pub to add comments!
Join Freedom Pub