I was thinking about so many people complaining that they only got $600 from each round of government covid relief. I’m wondering if they would have still felt that way if they had taken a moment to consider where the money is actually coming from. Before you spend the time to read this article, find a 5 to 7-year-old and ask them if they are ok with us taking a third to half of all of the money they will ever make in their lives and spending it on ourselves right now. If they ask why, tell them, simply, “because”. Their response will be an unfiltered reality to anyone who is kidding themselves that we aren’t doing just that.
The country has $26,945,391,194,615.15 in current debt and a $3.3 trillion dollar deficit which means it isn’t likely to go down this year. To break this down, BEFORE the 2020 economic disaster, debt per capita (the amount of debt is each person’s share of the national debt) was $69,063.79 and there is no alternate reality where the vast majority of citizens can be expected to pay that. Additionally, the United States spends a lot of money that it doesn’t collect. In fiscal 2021, the government budget per capita was $24,917, while tax collection was $22,916 equates to a current account deficit of $2001 per person.
So where does the extra money come from? We borrow it based on future generations’ ability to pay the interest and principal. To make matters worse, it is estimated that the Social Security Administration will begin tapping into its trust fund in 2022 and will be insolvent in 2035, forcing either drastic reductions in promised financial benefits to people who have funded it their entire working lives, or a sharp increase in taxes to fund it, or worse, both.
By 2038, total spending will be 26% of GDP and total debt service will be 14%. When the Baby Boom generation came of age in 1969 debt to GDP was 35.47%. It is currently 135.64% with no end in sight. It exploded under the Obama administration from 64% to 104% and remained there until the covid crisis hobbled the economy, and given the law of compounding will hamper future generations of Americans.
None of this takes into consideration the tremendous amount of debt and pension responsibility that many states have assumed, or the incredible grift in which higher education is engaged (a subject for another time). In summary, no, we couldn’t afford to shut the economy down due to COVID-19. No, we couldn’t afford to give most Americans $1200 in direct payments, and no, we couldn’t afford the $600 payments either. If you got one, look at your children and ask yourself if it was worth it.