US National Debt
Content
Assumptions
GDP Growth
Tax Revenue
Spending Inc.
Debt Interest %
1.032
0.19
1.075
0.05
(in trillions)
Annual Spending (2008)
Social Security
0.608
Medicare
0.386
Medicaid
0.209
Welfare
0.324
Interest on Debt
0.261
Disc. Spending
Total:
50
45
40
35
30
25
20
15
10
5
0
3.2% growth
19% of GDP is
collected as Taxes
5% interest on debt
(very optimistic)
1.114
2.902 Trillion
(in trillions)
Year
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
GDP
14
14.448
14.91034
15.38747
15.87987
16.38802
16.91244
17.45364
18.01215
18.58854
19.18337
19.79724
20.43075
21.08454
21.75924
22.45554
23.17412
23.91569
**Numbers might be off, but this gives a general idea**
Tax Rev Spending Sur/Defic Nat. Debt Defic/GDP Debt/GDP
2.66
2.902
-0.242
10.8
1.73%
77.14%
2.74512
3.11965 -0.37453
11.042
2.59%
76.43%
2.832964 3.3536238 -0.52066 11.41653
3.49%
76.57%
2.923619 3.6051455 -0.68153 11.93719
4.43%
77.58%
5.41%
79.46%
3.017174 3.8755314 -0.85836 12.61872
3.113724 4.1661963 -1.05247 13.47707
6.42%
82.24%
3.213363 4.478661
-1.2653 14.52955
7.48%
85.91%
3.316191 4.8145606 -1.49837 15.79484
8.58%
90.50%
3.422309 5.1756526 -1.75334 17.29321
9.73%
96.01%
3.531823 5.5638266
-2.032 19.04656
10.93% 102.46%
3.644841 5.9811136 -2.33627 21.07856
12.18% 109.88%
3.761476 6.4296971 -2.66822 23.41483
13.48% 118.27%
3.881843 6.9119244 -3.03008 26.08305
14.83% 127.67%
4.006062 7.4303187 -3.42426 29.11314
16.24% 138.08%
4.134256 7.9875926 -3.85334 32.53739
17.71% 149.53%
4.266553 8.5866621 -4.32011 36.39073
19.24% 162.06%
4.403082 9.2306617 -4.82758 40.71084
20.83% 175.67%
4.543981 9.9229614 -5.37898 45.53842
22.49% 190.41%
Broad Points
in Trillions USD
Point of no Return
Our National Debt
GDP
Tax Rev
Spending
GDP production (goods sold in economy)
Spending
Nat. Debt
Taxes collected
Final Thoughts
The reality of this data shows that spending (entitlement programs) must be cut back
significantly and taxes must be increased signficantly in order to make good on our
debt obligations. The political reality is that neither of these options will happen, maybe
an increase in taxes, but they can only be increased by so much before the economy
and jobs market take a major hit. A currency debasement must occur in order to bring
the debt and deficits in line. How big of a debasement is anyone's guess, but I'll wager
on a 50% to possibly 75% decline within the next decade. That sounds like a major
decline, but that's only 7% inflation for the next decade for the dollar to decline by 50%.
The trillion dollar question here is… what happens when you factor in declinning oil
exports and the end to cheap energy? The assumption of constant real GDP growth may
have been the "inconvenient truth" that Al Gore was referring to!
What's really amazing is that this doesn't
include the $10 Trillion in bailouts for
Freddie/Fannie and backing up countless
banks!
Inflation is a monetary phenomena.
Ex. Feds creating more money
Hyperinflation occurs when there is a
loss of confidence in the currency.
By debasing the dollar, our national debt
decreases in real dollar terms and our
products become cheaper to Foreigners
which will increase our exports!
By cutting back on spending,benefits and
increasing taxes massively we can slowly
payback our debt and realize lower living
standards and higher unemployment
If you were the government and wanted to
remain in power, what do you do?
(*Hint* Start the printing press)
GDP Growth
Tax Revenue
Spending Inc.
Debt Interest %
1.032
0.19
1.075
0.05
(in trillions)
Annual Spending (2008)
Social Security
0.608
Medicare
0.386
Medicaid
0.209
Welfare
0.324
Interest on Debt
0.261
Disc. Spending
Total:
50
45
40
35
30
25
20
15
10
5
0
3.2% growth
19% of GDP is
collected as Taxes
5% interest on debt
(very optimistic)
1.114
2.902 Trillion
(in trillions)
Year
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
GDP
14
14.448
14.91034
15.38747
15.87987
16.38802
16.91244
17.45364
18.01215
18.58854
19.18337
19.79724
20.43075
21.08454
21.75924
22.45554
23.17412
23.91569
**Numbers might be off, but this gives a general idea**
Tax Rev Spending Sur/Defic Nat. Debt Defic/GDP Debt/GDP
2.66
2.902
-0.242
10.8
1.73%
77.14%
2.74512
3.11965 -0.37453
11.042
2.59%
76.43%
2.832964 3.3536238 -0.52066 11.41653
3.49%
76.57%
2.923619 3.6051455 -0.68153 11.93719
4.43%
77.58%
5.41%
79.46%
3.017174 3.8755314 -0.85836 12.61872
3.113724 4.1661963 -1.05247 13.47707
6.42%
82.24%
3.213363 4.478661
-1.2653 14.52955
7.48%
85.91%
3.316191 4.8145606 -1.49837 15.79484
8.58%
90.50%
3.422309 5.1756526 -1.75334 17.29321
9.73%
96.01%
3.531823 5.5638266
-2.032 19.04656
10.93% 102.46%
3.644841 5.9811136 -2.33627 21.07856
12.18% 109.88%
3.761476 6.4296971 -2.66822 23.41483
13.48% 118.27%
3.881843 6.9119244 -3.03008 26.08305
14.83% 127.67%
4.006062 7.4303187 -3.42426 29.11314
16.24% 138.08%
4.134256 7.9875926 -3.85334 32.53739
17.71% 149.53%
4.266553 8.5866621 -4.32011 36.39073
19.24% 162.06%
4.403082 9.2306617 -4.82758 40.71084
20.83% 175.67%
4.543981 9.9229614 -5.37898 45.53842
22.49% 190.41%
Broad Points
in Trillions USD
Point of no Return
Our National Debt
GDP
Tax Rev
Spending
GDP production (goods sold in economy)
Spending
Nat. Debt
Taxes collected
Final Thoughts
The reality of this data shows that spending (entitlement programs) must be cut back
significantly and taxes must be increased signficantly in order to make good on our
debt obligations. The political reality is that neither of these options will happen, maybe
an increase in taxes, but they can only be increased by so much before the economy
and jobs market take a major hit. A currency debasement must occur in order to bring
the debt and deficits in line. How big of a debasement is anyone's guess, but I'll wager
on a 50% to possibly 75% decline within the next decade. That sounds like a major
decline, but that's only 7% inflation for the next decade for the dollar to decline by 50%.
The trillion dollar question here is… what happens when you factor in declinning oil
exports and the end to cheap energy? The assumption of constant real GDP growth may
have been the "inconvenient truth" that Al Gore was referring to!
What's really amazing is that this doesn't
include the $10 Trillion in bailouts for
Freddie/Fannie and backing up countless
banks!
Inflation is a monetary phenomena.
Ex. Feds creating more money
Hyperinflation occurs when there is a
loss of confidence in the currency.
By debasing the dollar, our national debt
decreases in real dollar terms and our
products become cheaper to Foreigners
which will increase our exports!
By cutting back on spending,benefits and
increasing taxes massively we can slowly
payback our debt and realize lower living
standards and higher unemployment
If you were the government and wanted to
remain in power, what do you do?
(*Hint* Start the printing press)
