I'm currently taking my final course in undergraduate. Advanced Accounting.
My professor just sent this doc out that he wrote titled "The National Debt and Why It Is a Problem". Not an assignment, just a heads up.
I think my professor could be a Bitcoiner in the making.
Also so refreshing to see something like this from someone in academia.
Here is what he wrote
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THE NATIONAL DEBT AND WHY IT IS A PROBLEM
PRESENT SITUATION DECEMBER 2024:
U.S. NET TAX REVENUE-ALL SOURCES: $4,270,000,000,000
FEDERAL BUDGET SPENDING: $6,270,000,000,000
DEFICIT $2,000,000,000,000
NATIONAL DEBT BEGINNING OF YEAR $35,000,000,000,000
DEFICIT FINANCING-“NEW BORROWING”: $ 2,250,000,000,000
NEW NATIONAL DEBT $37,250,000,000,000*
*Probably a little higher as we stand today and likely to approach
$38.0 trillion by the end of fiscal 2025 (September 2025)
Now, let’s convert all of these numbers to a typical American family
To understand the full impact of what has been going on
TYPICAL ANNUAL FAMILY INCOME: $ 52,700 per year
MONEY THE FAMILY SPENT $ 82,300 this year
NEW DEBT ON CREDIT CARD $ 20,000 from prior spending
CREDIT CARD DEBT-BEGINNING OF YEAR $ 330,000
ADD NEW DEBT ON CARD $ 20,000
NEW CREDIT CARD DEBT $ 350,000
Note: When the “Super Budget Committee” met last Fall with the mandate to “cut spending, they were able to cut $38,500,000,000 ($38 billion 500 million) from the Federal Spending Budget.
When this was announced it sounded like it was a lot of money. But if you strip away the zeros and convert it to a typical family, what was cut from the money the family spent was $385 out of a total spending of $38,200.
Do you see the problem now? Do you think that family above could carry a debt load of $350,000 after telling the bank they overspent their budget by $20,000? I don’t think so. If you were a bank or another lender would you increase their borrowing after their failure to stay within budget?
So, here are the observations
1. Our National Debt now stands at $37 Trillion Dollars, an astronomical sum.
2. The interest payments alone on this debt will be $1.2 Trillion Dollars, roughly 25% of every dollar the government collects in taxes. It is unsustainable. Remember, we only take in $4.3 Trillion in taxes each year but we overspend by roughly $2.0 trillion.
3. Our government spends about two trillion dollars more than we take in in terms of taxes. Are you able to do this with your family budget? Why can’t our government live within its means, that is, don’t spend more than you take in. That seems like a noble objective doesn’t it? What you need to understand about government spending is that is something that has been going on since time immemorial….the notion that if you give money to the people, they will vote for you! It is ridiculous on its face, but there it is.
4. Every time someone in the government says they are going to “give the middle class and poverty stricken Americans $25,000 each to “motivate them to buy their first home”, understand that money needs to be taken from someplace else, out of the pockets of some deserving group. Every time you hear a politician say “we are going to give a $50,000 tax break to the middle class to help stimulate investment in small businesses, that “gift” needs to be taken from someplace else. Oh, and by the way, a $50,000 tax cut is not how you stimulate investment in new small businesses. You accomplish that by guaranteeing loans to small businesses. Every time we give grants to countries that hate us, it must be taken from someplace else. Except that mysterious “someplace else” never seems to surface…so we continue to spend more money than we really have. At some point the bubble will burst…and I am afraid we are close to that point right now.
5. Our government is no different than a very large business; hence, it needs to be run and managed by people who understand business, finance and economics…making money, cutting costs, streamlining to achieve greater efficiency and productivity and growing our economy as reflected in our GDP (Gross Domestic Product). Did you know that for the first time in our history our GDP of $27 Trillion is exceeded by our National Debt by $8 Trillion Dollars or 29.6 %. That is not a very good sign.
If we do not begin the process of getting our debt under control, and more importantly drastically reducing spending the country of our fathers and grandfathers will soon find itself faced with some very real threats too ominous to contemplate. And your future and your children’s future will carry burdens that are excessive and unnecessary.
Thus ends the lesson of the Significance of our National Debt. Some people…fearmongers….yell and scream that the greatest threat to our civilization is climate change. Hogwash! The greatest threat to us is our profligate wasteful and unproductive spending and it has to stop. If not, the history books will simply say that like all the ancient civilizations….the Egyptians, the Greeks, the Ottomans, the Romans….we did it to ourselves.
