The Palmetto Insider

The blog of the South Carolina Policy Council

You Now Owe $40,000 – plus

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Driven by taxpayer bailouts of banks, insurance companies, auto companies, and other financial institutions, as well as wars and economic stimulus to counter the “Great Recession,” the U.S. annual deficit has tripled since 2007, says a new report from the Mercatus Center at George Mason University—Everyman’s Deficit: Spending Beyond Our Means

According to 2010 Office of Management and Budget estimates, the deficit will reach $1.4 trillion this year, says economist Bruce Yandle, Dean Emeritus at Clemson’s College of Business. That’s 10 percent of Gross Domestic Product (GDP).

In March 2010, the total federal debt stood at almost $14 trillion. Each person’s share of the debt is now about $40,000 for every man, woman, and child in the United States.

Adjusted for 2009 dollars, the current federal deficit is nearly three times what it was at its historical peak in the 1940s.

“Two combined forces yield a stout formula for endless deficits,” says Yandle. “To keep their jobs, politicians want to bring home the bacon to their constituents. This means they will almost always prefer increased spending to spending reductions. And to get (and keep) their jobs, politicians always promise not to raise taxes. The result is systematic deficits.”

As for South Carolina’s state debt, State Budget Solutions calculates that every private sector worker in the state owes more than $21,000 for their share of the deficit. That’s a lot of debt for a relatively small state with one of the nation’s lowest average per capita incomes—that’s a burden we don’t need.

StateDeficitsNationwide

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Written by Robert Appel

August 2, 2010 at 9:17 am

Posted in Economics, Limited Government

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