A friend on Facebook pointed out the excessive spending and the approaching deficit in California. I thought I would do a little "back of envelope" calculations on the federal spending problem. This has been a concern of mine for decades. The chickens could come home to roost next Tuesday, or it could take 20 years. As Herb Stein said in the 70's, "If something can't continue, it won't."
While these numbers are very suspect since we are on the crest of a recession and the covid spending is winding down, we can roughly do the numbers. What are the numbers?
Spending is 6.2 trillion. This includes 1.2 trillion for social security and 760 million for Medicare. Naturally as I am 68 I would opposite cuts there. A joke, but still a true statement form me that shows the problem. Politically such cuts seem unlikely anyway. So other spending is 4.2 trillion. The estimated deficit is 1.3 trillion. So to balance the budget we need a 30% cut.
But I left something out. Interest of federal debt is 400 billion a year. This is headed up as interest rates rise. So assuming the US doesn't repudiate its debt the ratio is 3.8 trillion with a deficit of 1.3 trillion or a cut of 34%.
We are doomed. I was going to use a different word, but this is a family blog.