Taxes, Death and Debt

                         Taxes, Death and Debt

(These numbers are estimates just prior to the several trillion  dollars in new debt created because of a virus. For some reason, Black Swan events are rarely positive.))
Debt held by the public will rise from 81% of GDP today to above 98% by 2030 — from $17.2 trillion today to $31.4 trillion then.

This fiscal year, 2020, the federal government will collect $3.6 trillion in tax revenues. But the government will expend $4.6 trillion. This means that the government will have to borrow $1 trillion this year alone, in order to cover a deficit of 4.6% of GDP. This is the first trillion-dollar deficit not due to a global recession.

The money to fund the deficit comes from individual and institutional investors, both domestic and foreign. China is the second largest foreign investor in our federal debt, behind Japan.

According to the CBO, this overspending will continue and expand over the next decade, from 21% of GDP to 23.4%. Revenue as a share of GDP is projected to grow from its current 16.4% level to 18% in 2030, or $5.75 trillion. But that's not enough to cover the $7.5 trillion the federal government will spend then, hence a projected budget deficit of $1.74 trillion.

Debt held by the public will rise from 81% of GDP today to above 98% by 2030 — from $17.2 trillion today to $31.4 trillion then.

It is interesting that we are very worried about the theoretical risks of global warming to subsequent generations when the absolutely certain risks of debt to subsequent generations are ignored.