More than three-fourths of all personal income tax from American taxpayers will go directly toward paying off the interest on our massive and ever-burgeoning national debt.
FAIRtax reported the sobering data on July 20 with the headline, “Interest Payments on U.S. National Debt Will Shatter $1,140,000,000,000 This Year – Eating 76% of All Income Taxes Collected,” based on June numbers. Yet politicians from both parties only increase instead of restricting government spending. We are headed for a national financial catastrophe of epic proportions.
Economist E.J. Antoni brought attention to this major problem, FAIRtax explained.
“Interest on the federal debt was equal to 76% of all personal income taxes collected in June – that’s the Treasury’s largest source of revenue and three-quarters of it gets consumed just by interest; does Congress know? Do they even care?” Antoni asked. Unfortunately, the answer to the latter question would seem to be no.
Antoni says the cost to service the federal debt has exploded 33% in a single year, and [is] set to get worse.
The economist also reports that interest on the national debt was the single biggest expense for the government in June, far outrunning other critical public services, and the Treasury expects it will break the $1.14 trillion level this fiscal year.
Yet, as noted above, both Republicans and Democrats in Congress spend profligately as if the money flow is inexhaustible and there will never be a price to pay. The only economic “growth” now comes from adding to the debt. It is an understatement to say this is completely irresponsible.
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Our Founding Fathers would be horrified. For instance, George Washington, our first and greatest president, wisely warned in his Farewell Address against the accumulation of national debt:
As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible, avoiding occasions of expense by cultivating peace, but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it, avoiding likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertion in time of peace to discharge the debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear.
Nowadays, our politicians are constantly adding to the burden for both ourselves and our posterity to bear.
I wrote in September of last year how the federal debt is absolutely unsustainable. The government simply does not have the money it is spending, which is why we keep going deeper and deeper into debt. Yet many Congressional Republicans caved to the Democrats this year on their outrageous spending wishlist, and, as Rep. Andy Biggs (R-Ariz.) put it, “Americans got hosed.” Our representatives are merrily driving us off the financial cliff.
Hopefully, we can vote in more fiscally responsible representatives this November, but it could already be too late. We need to take strong and aggressive action as soon as possible to slash government spending.
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