Day 2: Personal Finance Goes to D.C.

Before continuing…if you haven’t already, be sure to start with my post regarding the Obama Administration Budget Proposalfollowed by Day 1 in this series.


 

Federal Debt Held by the Public

Graph obtained here.

The Congressional Budget Office (CBO) is an independent, non-partisan organization that analyzes Congressional policies regarding budgetary and economic issues.  According to the CBO, the federal budget deficit this year will rise in relation to the size of the economy for the first time in the past six years.  While it almost sounds good to hear that the deficit had been decreasing, the fact of the matter is that the CBO estimates the 2016 deficit at approximately $544 BILLION – that’s HALF A TRILLION DOLLARS…in a single year.  Decreasing or not, that still leaves us in the red.  This is projected to increase our debt load to about 76% of GDP by the end of 2016, an increase of 2% since last year.  From the chart above, you can see that the debt-to-GDP ratio has, in fact, been higher in the past (i.e. during WWII) but our current trend continues to raise our debt higher and higher, pushing us to a projected 86% of GDP over the next decade.  Overall deficits for the next decade are estimated to total $9.4 trilion with growth of government spending outpacing revenues, as liabilities for Social Security, health care, and interest on the debt continue to grow, further compounding with the addition of more debt.  The CBO report goes on to detail that, if current policies remain unchanged, as that is what their predictions are based on, then our debt will rise to as high as 155% of GDP in the next thirty years.  Please read the full CBO report here; I honestly find it to be more than a little horrifying.

 


Please tune in Monday for day 3 regarding my thoughts on ways to combat the growing problem, in the hopes of reigning in government spending.  Don’t forget to follow along via WordPress, or with your e-mail in the right-hand column, to ensure you don’t miss the remainder of the series or any future posts.  My family and I would love to have you along for our journey; enjoy Valentine’s Day tomorrow.  Give your sweetie and/or loved ones a smooch, tell them all about my blog, and encourage them to follow along!  🙂

 

-Frugal RN

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6 thoughts on “Day 2: Personal Finance Goes to D.C.

  1. I sure wish more of the politicians were talking about this – especially in the Republican debates. I would hope for them to be proposing a balanced budget amendment to the constitution.

    Liked by 1 person

    • We certainly won’t be hearing anything of the sort coming from Hillary Clinton or, especially, Bernie Sanders. I believe our best hope, at least from the standpoint of fiscal responsibility, will be either Ted Cruz or Ben Carson. I’m a registered Independent and describe myself as Conservative, as I tend to believe our two party system’s back and forth toe-the-party-line BS is a big part of our problem, as well. We have liked Ben Carson since the last election cycle and would love to see him pick up some traction as we move forward.
      Talking about this topic trends to get a candidate a lot of flack because that leads to talking about where cuts could/should be made and that never goes well because somebody ends up hurt. It’s certainly not an easy subject…but one that must ultimately be addressed, rather than continuing to kick the can down the road.

      Liked by 1 person

      • I haven’t looked at the candidates closely yet – we are in Minnesota, so our state always goes overwhelmingly Democrat. I did notice that Cruz & Carson are “flat tax” guys. I do like that. It seems like all the Republicans have some kind of tax cut approach – I hope they also focus enough on spending cuts.

        Liked by 1 person

        • Last I saw, Carson is calling for somewhere around 14% but I have no idea how he came up with that number. While I’ve thought the idea of a flat tax has sounded like a potentially good for awhile, my only fear is, if they don’t focus on spending cuts as well (like you mentioned,) the “flat” part will inevitably start trending upward or we will just continue borrowing and nothing is solved.

          Liked by 1 person

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