Currently, we are taking in about $2 trillion a year in tax dollars. We have a net federal debt of about $16 trillion. And we are spending $1.3 trillion dollars more a year than are being collected, which has to be either borrowed or printed. The printing, of course, lowers the value of existing dollars and fuels inflation. Right now it is being mostly borrowed.
And the Houser curve means that the federal take of tax dollars stays about the same at 19.3% of GDP regardless of the tax rate. Higher or lower, the net flow to the government stays the same.
Now at the current rate of borrowing of 1.3 trillion a year, adding to the $16 trillion we already owe, means that we are accumulating such a level of debt that in 12 years we will owe an additional $15.6 trillion, bringing our total owed to $31.6 trillion. At that point, it will take the entire $2 trillion that is collected in tax dollars to pay just the interest on the debt. Obviously, these numbers change around a little with the probable inflation, but this is the ball park of where things are going.
So if you are planning a cushy retirement, just know that the plan will have to change to taxing and/or seizing everything that isn’t nailed down from anyone that is still working or that has ANY assets at all in order to keep the status quo afloat. And that will mean that all 401Ks are at risk. And all stocks, bonds and private retirement accounts. And don’t expect the politicians to act for the women and children first as the ship of state starts to go down.
There’s your change.