I'm not an economist nor the son of an economist. I come from a long line of just pay your bills and avoid debt the best you can kind of people.
I understand our national debt to be the total amount of money owed by the government. The federal budget deficit is the yearly amount by which spending exceeds revenue. Add up all the deficits for the past 200+ years and you'll get the current National Debt.
Somehow our national debt has made it to $9,340,380,921,058.13 as of this morning. I can't fathom numbers that are in the trillions, but that's what we owe. Who do we owe? I don't completely understand this either, but somehow we owe foreign governments and individuals 23% of this money. That's bad enough, but what is worse is the money we have been taking from our own "reserves" (money collected through taxes, SS payments, etc.) to fund ongoing budgets to the point that we owe ourselves 41% of this total national debt! Good grief. I don't know what it all means, but I can tell you it ain't good. It's one thing to stiff the Chinese government money, but if we fail to replenish our own "reserves", some hard times are certain when people don't get there Social Security checks, medicare benefits, etc. The ripple effect of that kind of shortfall will hit everyone.
According to Ed Hall, based on the estimated population of the United States (303,897,709), each citizen's share of this debt is $30,735.28. The National Debt has continued to increase an average of$1.44 billion per day since September 29, 2006!
O.K., here's where I just don't get it- why is the government sending me a check for $1200? I understand it's part of a stimulus package that is supposed to jump start a slowed economy, but should we really be writing checks at such a time? Now I know the reaction of many will be- "You better believe they should give me the money...with all the taxes they charge me!". O.K., I understand that perspective, but there's tons of us who pay very little federal income tax, yet we're still getting a check. As a minister I have my salary divided where 1/3 of my salary is designated as "housing" and is therefore not taxable. This is an appreciated tax advantage for ministers and it helps the churches that pay them also. This also makes my taxable income lower and based on that, plus my dependents and deductions, I pay very little federal income tax, yet I'm getting a $1200 check from a government that owes over $9 trillion big ones. Makes little sense to me. There are many others who do not pay $1200 in federal income tax each year, yet they'll also be getting a check.
I know the idea is for me to go out and spend it to stimulate the economy, but when our nation is $9 trillion in the hole, I think it's high time we start enacting some immediate, painful short term spending stops that will keep our grand kids from hating us in the long run. Spending our way out of a recession with no regard to the burgeoning debt is just plain short-sighted and stupid. We have created an entitlement mindset that has trained several generations to depend on the government to provide for many things. It seems to me this expectation has helped produce the fragile house of cards feel our economy seems to have. At some point, some generation is going to get stiffed as it relates to what it thinks should be coming to it. It's going to be ugly, but it's going to happen. There's no way you can pay me now without someone else having to pay for it later.
All you economic experts, fire away, I'm hoping I am way off base here. In the mean time, I can't wait to spend my check.
Ah, I think I see the problem....