"Our Country!
In her intercourse with foreign nations may she always be in the right;
but right or wrong, our country!"

    --Commodore Stephen Decatur

Monday, July 18, 2011

How Big Is $1.5 Trillion?

Marinus van Reymerswaele, "Two Tax Collectors"

With talks on raising the debt limit grinding along in Washington, D.C., it's worth considering just how big the problem really is.  President Obama and the Democrats have been pushing tax increases as a solution to the nation's budget woes, but don't think for a moment that such increases will only affect the super rich.  When the tax man comes around, we're all going to pay the price for the government's profligacy.

According to the Congressional Budget Office, the estimated 2011 U.S. federal budget deficit is $1,480 billion dollars.  But what does that really mean?  Comparing this number to data from the International Monetary Fund, the U.S. federal deficit is roughly the same as the Gross Domestic Product of the following countries and regions:
  • Canada - $1,574 billion
  • India - $1,537 billion
  • Russia - $1,465 billion
  • Spanish-speaking South America (i.e., except Brazil) - $1,443 billion
  • Spain - $1,409 billion
  • Australia and New Zealand combined - $1,375 billion
  • All of Africa, minus South Africa - $1,357 billion
Consider this when evaluating President Obama's claim that we can solve the nation's fiscal problems if we simply close some tax loopholes for "millionaires." Unless we make major cuts to spending--including entitlements--the scale of the problem is so immense that we are all going to have to bear some of the burden.

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