Every so often when the budget talk in Washington DC gets big, I try to get my head around the size of the dollars they are talking about. The following is my simple math to understand what it could mean to me as an individual. Let’s start by pulling together some basic facts to build on.
- US 2010 Resident Population: 311,121,509 (www.census.gov US population clock at April 7, 2011, 16:00 UTC)
- US Civilian labor force: 153,022,000 (www.bls.gov, March 2011)
- US Civilian labor force current employed: 138,962,000 (www.bls.gov, March 2011)
2012 Federal Budget as proposed on http://www.whitehouse.gov/omb/budget on April 7, 2011: Total outlays: $3,729 Billion (http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/tables.pdf)
- Health care: 22.62% or $843 Billion
- Medicare 12.86% or $479 Billion (incl in health care above)
- Medicaid 7.28% or $271 Billion (incl in health care above)
- Social Security: 20.04% or $747 Billion
- Defense: 19.27% or $718 Billion
2012 Projected Deficit: $1,101 Million.
US National Debt: 14,278,753 Million (~$14 Trillion) (http://www.usdebtclock.org/ on April 7, 2011). The US has the largest national debt of any country in the world (CIA Fact book). Only 15 countries have a national debt over $1 trillion.
Ok, so we got the raw numbers assembled. Let’s start doing some math.
Here’s is the “fair share” of the 2012 Federal Budget to every man, woman and child in the US population: $3,729 Billion / 311 Million people = $11,999 owed by each person.
But since only 153 Million people are employed, here’s how it breaks out to each worker: $3,729 Billion / 153 Million people = $24,372 owed by each worker.
The good news is that’s only $468 taken out of your paycheck each week.
So while you’re paying for that, let’s assume that Congress does a balanced budget effective today. Now it is time to knock out the US National Debt.
Here’s is the “fair share” of the National Debt to every man, woman and child in the US population: $14,278,753 Million / 311 Million people = $45,912 owed by each person.
But since only 153 Million people are employed, here’s how it breaks out to each worker: $14,278,753 Million / 153 Million people = $93,325 owed by each worker.
The good news is that’s only $1794 taken out of your paycheck each week in addition to what you’re paying to fund the government’s annual budget.
That’s quite a bit of money to suck out of the paycheck. Let’s turn the $93,325 owed to a 30 year loan at the current prime interest rate of 3.25%. Each worker now only owes $406 per month for the next 30 years to pay down our debt in addition to the annual costs to run the government.
Now I recognized that there are economic factors at work here where business can generate value which translates to paying taxes as well. My simple theory is that part of the economy’s engine is the population. The population spends money and pays taxes. We have a government for the people and by the people, so in the end we foot the costs.