4 ms·

So the national debt is about 70x the annual tax revenue?

rjbwork 9y ago
That is refund amounts, not revenue.
nkozyra 9y ago
Annual federal tax revenue is just under $4T[1] Keep in mind a lot of our "debt" is future obligations, which makes comparing to present day revenue kind of useless. [1] http://www.usgovernmentrevenue.com/total http://www.usgovernmentrevenue.com/total
- knodi123 9y ago
  ?? All Debt is a "future obligation". That's what debt means.
  - nkozyra 9y ago
    A lot of debt represents expenses already incurred instead of budgeted future expenses. Congress essentially mandated savings for future expense.
    - knodi123 9y ago
      whoa, so a lot of our national debt is just obligatory future spending, and we add it to the total figure because we don't have a choice about spending that money in the future? I honestly didn't realize that!
      - nkozyra 9y ago
        Well we do have a choice. It usually manifests in suggestion of extending the retirement age.
deleted 9y ago
[deleted]
geofft 9y ago
US individual income taxes are about $1.8T a year (the $250B number in the link is refunds). There's also about $1.2T in payroll taxes paid by employers, $500B in corporate taxes, and a few smaller things like tariffs and interest, etc., adding up to a little over $3.5T total revenue per year. The current gross national debt is just shy of $20T. So, that's about 6x the annual government revenue. In theory, national debt is "good debt" like a home mortgage, and having a home mortgage worth about 6x your salary seems pretty healthy.
- cwkoss 9y ago
  Do you know of any good articles explaining the concept of 'good debt'? I understand the position that govt taking debt out if the funds can increase economic growth->more tax revenue. However, this concept seems to break down when debt is carried over year to year and used to pay interest expense on other debts.
  - kcanini 9y ago
    If you can borrow money at X% and put it towards a productive use that generates Y% returns, then it is worthwhile to do so when X < Y. The government can currently borrow money at around 1-3% interest [0], depending on the length of the term. Presumably, the return you can generate from borrowed money diminishes as you borrow more money, so "good debt" is some amount of money that you have borrowed that allows you to be more productive and pays for its own interest, in a sense. But borrowing even more than that would start to become less useful, and drag down your overall return. [0] https://www.bloomberg.com/markets/rates-bonds/government-bonds/us https://www.bloomberg.com/markets/rates-bonds/government-bon...
- joeletizia 9y ago
  6x your salary is pretty high. I've stuck to 4x personally.
  - BackODaEnvelope 9y ago
    I've read articles in the past which claimed 2-2.5x, historically.

That is refund amounts, not revenue.

Annual federal tax revenue is just under $4T[1] Keep in mind a lot of our "debt" is future obligations, which makes comparing to present day revenue kind of useless. [1] http://www.usgovernmentrevenue.com/total http://www.usgovernmentrevenue.com/total

knodi123 9y ago
?? All Debt is a "future obligation". That's what debt means.
- nkozyra 9y ago
  A lot of debt represents expenses already incurred instead of budgeted future expenses. Congress essentially mandated savings for future expense.
  - knodi123 9y ago
    whoa, so a lot of our national debt is just obligatory future spending, and we add it to the total figure because we don't have a choice about spending that money in the future? I honestly didn't realize that!
    - nkozyra 9y ago
      Well we do have a choice. It usually manifests in suggestion of extending the retirement age.

deleted 9y ago

[deleted]

geofft 9y ago

US individual income taxes are about $1.8T a year (the $250B number in the link is refunds). There's also about $1.2T in payroll taxes paid by employers, $500B in corporate taxes, and a few smaller things like tariffs and interest, etc., adding up to a little over $3.5T total revenue per year. The current gross national debt is just shy of $20T. So, that's about 6x the annual government revenue. In theory, national debt is "good debt" like a home mortgage, and having a home mortgage worth about 6x your salary seems pretty healthy.

cwkoss 9y ago
Do you know of any good articles explaining the concept of 'good debt'? I understand the position that govt taking debt out if the funds can increase economic growth->more tax revenue. However, this concept seems to break down when debt is carried over year to year and used to pay interest expense on other debts.
- kcanini 9y ago
  If you can borrow money at X% and put it towards a productive use that generates Y% returns, then it is worthwhile to do so when X < Y. The government can currently borrow money at around 1-3% interest [0], depending on the length of the term. Presumably, the return you can generate from borrowed money diminishes as you borrow more money, so "good debt" is some amount of money that you have borrowed that allows you to be more productive and pays for its own interest, in a sense. But borrowing even more than that would start to become less useful, and drag down your overall return. [0] https://www.bloomberg.com/markets/rates-bonds/government-bonds/us https://www.bloomberg.com/markets/rates-bonds/government-bon...
joeletizia 9y ago
6x your salary is pretty high. I've stuck to 4x personally.
- BackODaEnvelope 9y ago
  I've read articles in the past which claimed 2-2.5x, historically.