Wednesday, May 26, 2010
Real Life Horror
Hey my fellow young people! Summer time is a great time for getting your pants scared off. I mean, campfire ghost stories, horror movie marathons, and who can forget that Nightmare on Elm Street is still in theaters with another thriller Splice on the way? In salute of our generation's love of all things horrifying, stupefying, and downright scary I went and found the scariest reality facts I could.
You ready for this?
Check out usdebtclock.org and look at the red numbers.
If that didn't scare you (or you were too lazy to check it out), just keep reading.
Our national debt (that's money we do not have but spend anyway) just topped $13 trillion. Absolutely terrifying, no?
Let's put that into perspective, then, shall we? Our current GDP (Gross Domestic Product, aka the dollar worth of every man, woman, child, company, and service in America for the past year) is only $14 trillion. To further simplify, this means the government currently owes about 90-93% of what our country makes in a year to outside sources (*cough* China *cough*). The fun doesn't stop there.
The fed currently only takes in about $2 trillion in tax revenue. So if we freeze all spending, and the recession doesn't get any worse, it will take about seven years to pay off all of our debt. Both of those events are highly unlikely, however. Just yesterday congress opened talks on another multi-billion dollar "stimulus" bill (remember how well the last one worked?) and the unemployment rate is currently just under 10% (and going up every day). So who knows how long it will take. Probably more than a decade or two at the rate the current administration is spending. But you know, they could always raise taxes.
Oh taxes. Since most of us in the "millenial" generation either don't pay those yet period, or don't actually own anything the government would want to tax (ie, homes, investments, cars, etc), we tend to not think about these things. I mean, taxes only affect our parents, or "rich people". Au contraire. Let's personalize this.
At the very moment of writing, every citizen (man, woman, or child) owes $42,028 in debt. Every taxpayer, however, owes $117,987 and some change. That's more than most people make in a year. We 18-25 year olds are rapidly entering the taxpayer bracket, especially college students and grads who hope to reach about $50-100 thousand per year in the next five years.
Now that $117,987 and some change does not even account for the fact that not only do 46% of taxpayers not actually pay anything, but at least half of those who do not pay taxes actually get money from the government when they file their tax forms as well. So that means the 54% who do pay taxes owe a lot more than $117,987. I'm not an accountant, but I would put the actual debt as near $200,000. (psst. Guess where most of us college students and grads end up on the divide?)
So what does this mean? Again, pretending the national debt and tax rates hold steady, let's examine this. Supposing you do fairly well in your start-up, entry level job upon leaving college you make $60,000+ a year. (That's single income, no kids. Not bad, eh?) You would have to work almost two full years just to work off your fair portion of the debt and about three to pay off what you actually owe as one of the unlucky few who actually pay taxes. That's with no other expenses. I mean none. No cable (or dish), no food, no electricity, housing, water, car, or even college debts. Add just the basic necessities in (food, water, house, electricity, clothes, and heck, even a car to get to work in) and devote every other penny to paying off the federal debt, you're looking at about five to ten years of your life spent working for the federal government. Again, this assumes a total spending freeze.
That is five years (at least) of your life devoted to paying for things like medicaid/medicare, social security, and federal pensions (the top three spenders) that do not help you out one bit. You get no video games, no movies, no vacations, no social security, no medicaid/medicare and definitely no pension, let alone a federal one. Just the basics and the federal debt.
Except, there is no spending freeze. The tax rate will go up (unless you don't want to make money, in which case none of this affects you anyway, you lazy bum). Basically, the fed will keep spending more than we earn so the amount we have to pay each year will go up. More and more of our lives will be spent paying off the cost of the decisions made today. And probably not just our lives, but our children's and grandchildren's as well. We will spend our entire life paying for this. Not the government (whose pensions we provide as well) or the "rich" (which I was really looking forward to joining some day), but us.
Like I said, the scariest thing I could find. And unlike A Nightmare on Elm Street, this is all true.
I dare you to prove me wrong on this.
(ps. Dear readers, could you help out my challenge by telling your liberal acquaintances about me? Unlike our current leaders, I do not like to argue in an echo chamber.)