With finances in such disastrous shape it’s fair to ask again just how the average American is going to be in any position to pay off his share of the national debt. The answer is, he isn’t. If that’s the case, the next question is, how will the national debt be paid? The answer to that is, it won’t be.
There was something for everyone in the release last week by the Congressional Budget Office of its August update and outlook. The federal government’s revenues are expected to top $3 trillion this year for the first time in history, thanks to individual income taxes rising by six percent, payroll taxes by eight percent, and corporate income taxes by 15 percent. Those infatuated with big government are celebrating the event as a reflection of an improving economy resuscitated by government spending and stimulus programs. Small government advocates, on the other hand, are decrying the event by reminding those who will listen that that is $3 trillion extracted from the economy, starving it of much-needed investment capital, consequently making the economy much weaker than it otherwise would be.
The CBO announced that the federal budget deficit for the year will amount to a paltry $506 billion, some $170 billion lower than last year. It noted that: “At 2.9% of gross domestic product (GDP), this year’s deficit will be much smaller than those of recent years (which reached almost 10% of GDP in 2009) and slightly below the average of federal deficits over the past 40 years.” Cue the trumpets from the Left: Despite huge increases in government spending to fight the Great Recession, the economy is now rebounding strongly enough to reduce the deficit substantially.
[…]
