Are we at the point of no return? There comes a point that we just can’t handle debt anymore. Our country rating can decrease, it will be tougher for us to borrow abroad, our markets will lose money in interest rate swaps, our money will be worth less when we try to print more money…it’s just a bad scenario. Today, the national budget is running a deficit of $12,245,872,000,000. In case you missed it, that’s $12.2 trillion. Our GDP is $14.4 trillion…hence our government has a deficit that almost exceeds our entire nations economic output. Under Obama, the government spent $3.52 trillion this year, which is almost 20% more than was spent in 2008.
 
The government doesn’t pay for all of its programs through taxes, but tax revenue does account for a large share of the total revenue. In 2008, the federal government collected $2.5 trillion through taxes…this number dropped to $2.1 trillion in 2009, which is $1.42 trillion less than the government spent. Below you can see that 81% of tax revenue comes directly from the citizens in either income taxes or payroll taxes but don’t think that corporate taxes and excise taxes don’t have an impact on you, they do. It get’s worse…follow along.
 

 
Another graph shows how the sources of revenue for the federal government have changed over the years. The most striking thing is how much payroll taxes have increased. Why? A little thing called expanding government programs. Social Security and Medicare are the primary reasons that the proportion of federal revenue coming from payroll taxes has grown so drastically.
 

Social Security is funded solely through payroll taxes. As baby-boomers are getting older and contributing less to payroll taxes, the future looks bleak. Medicare and Medicaid are funded primarily through taxes but have alternative sources of revenue as well. Either way, did you know that these three government programs are called “uncontrollable entitlements”? Sounds nice, right? The costs of SS, Medicare, and Medicaid are growing faster each year than tax revenue and GDP are growing. T-R-O-U-B-L-E.
 
That said, do you really think that universal health care would not add to our tax burden? Do you really think it would be a fully self sustaining program?
 
Now, just for fun, let’s look at what each taxpayer would pay if the government handed over the full weight of the deficit to taxpayers. Again, just for fun. 12,245,872,000,000/104,918,432=$116,782. Yipes.