With all the money flowing from the government with the various bailouts, I, as a layman, wanted a better understanding of the magnitude of these new debts vs our government finances.
With all the money flowing from the government with the various bailouts, I, as a non-economist, wanted a better understanding of the magnitude of the bailout costs vs our government finances.
So first, I visited the following site which compiles budget information for the US.
http://www.usgovernmentrevenue.com
According to the site, our economy has a total US GDP of 14.311 trillion dollars.
Now that I have an idea of the total size of the economy, on to total government revenues....from the same website.
Total government revenues are approximately 2.521 trillion dollars. 1.565 trillion from income taxes and 908.1 trillion from social security. Income taxes provide approximately 2/3 of US revenue with Social security providing approximately 1/3. Individuals provide 1.219 trillion in income taxes while corporate income taxes total 345.3 trillion. Individuals provide approximately 80 percent of the income tax revenue while corporations provide the other 20 percent.
So 2.5 trillion dollars revenue from a total GDP of 14.3 trillion.
Now to the spending side....
http://www.usgovernmentspending.com/...
Spending for 2008...apparently not including the bailout costs....
2008 2,931 trillion
So subtracting the 2.5 trillion dollar revenues from the 2.9 trillion dollar expenses produces a 363 billion deficit for the year-again apparently not counting the bailout costs.
Summary of 2008 Expenses-not including bailout costs??:
Defense 728.7 billion
Health Care 680.8 billion
Pensions 667.8
Welfare 271.4 billion
Interest 243.9 billion
Education 104.3 billion
Other spending 87.9 billion
Transportation 80.3 billion
Protection 46.2 billion
General Government 19.8 billion
Old age pensions and health services are a little over a trillion dollars. One third of the total spending budget. These senior pensions and senior health service costs are huge and one reason everyone is so worried about the baby boomer retirement. Those costs will balloon with the baby boomer retirement.
Next largest item is defense at 728.7 billion.
So a 700 billion dollar bailout is the equivalent of doubling our defense budget. The annual deficit would increase from 363 billion to over a trillion dollars for the year. I am not considering the costs of earlier bailouts over the last couple of months because I don't know the sum total. Nor do I know the future obligations/costs incurred by the bailouts.
So in terms of this years US annual budget, 700 billion dollars effectively triples our deficit for 2008.
Note our total annual interest costs on borrowed money
are 243 billion dollars annually. The increase in deficit spending should produce a corresponding increase in next years interest costs.
I have first looked at US government revenues vs expenses. Now I want to see total US government debt vs the 700 billion dollar bailout
and so I go here:
http://www.treasurydirect.gov/...
The treasury site gives a total US government debt of 10 trillion dollars. So adding another 700 billion dollars to the current debt, puts the US tax payer obligations to around 10.7 trillion dollars vs a total US GDP of 14 trillion dollars. This 700 billion dollar bailout is around a 7% increase in our total debt not counting earlier bailouts this year.
So the US government income vs spending is out of wack.
The US government is borrowing more money than
it is receiving each year. The total amount owed is
increasing annually. Not a good situation for you or me or the government. So to add an additional 700 billion dollars of debt or not? It better be for a very, very good reason.
At some point spending must be reduced and/or revenues increased.
What spending to cut and how to increase revenues??????
Any ideas??