The annual report of the US Treasury was recently published. It’s a financial report, written from the perspective of a treasurer (go figure).
A few big take aways…
Debt is $20.4 trillion.
Income was $3.4 trillion.
Deficit spending – above income – was $1.2 trillion.
Assets of $3.5 trillion – primarily student loans.
Assets minus liabilities gives a view into the net worth, and using any amortization table will give a view into how long it will take for our country to have a net positive worth.
The Treasury report describes that the difference between the 2016 and 2017 revenues were $1 trillion. See page 241 of 256 pages in the pdf file.
But clearly this extra $1 trillion was not large enough to cover the desired expenditures, that being a net cost of $4.5 trillion, which required deficit spending larger than the increase in revenue year-over-year.
If revenue is insufficient to afford net costs, then options are quite limited for a solution and resolution. In short, the US Treasury must recommend increased revenue, decreased expenses, and/or encourage national officials to invest more effectively.
To pay off the debt, the Treasury applies a portion of its revenue towards debt service payments. Defaulting on these debts is unthinkable.
Out of the $20.4 trillion federal debt, $7.7 trillion are insurance payments and other benefits owed to American people including those who have worked as federal employees, veterans, some of which have been injured in war. In no way should we default on promises to provide reasonable healthcare to Americans who have committed their lives to public service, even to the point of injury in the line of service and duty.
$14.7 trillion are “federal debt securities” – such as government bonds held by people and other investors who have chosen to loan money to the government. America’s Treasury absolutely cannot go into a long-term default arrangement on these loans – it would certainly contribute to massive financial calamity, as people and other investors would likely begin to find creative and potentially destructive ways to capture what they’ve lost.
It is absolutely imperative that America’s Treasury honors its debts – which requires revenue, and drastically increased revenue, and starting NOW.
From where does America’s Treasury get its revenue? A full 80% of the revenue is exclusively dependent on income taxes (page 8 of 256).
These income taxes generally only come from the independent decision of two people: one who decides to work, and another who decides to remit money to the worker.
Yet, amidst the obvious budget shortfalls and rising debt service payments, there is no national momentum, much less any program, law, or other incentives that are aimed at encouraging people to remit as much money as possible to the broadest base of people who have expressed an interest in working.
We’ve written about how philosophers have historically described the economics of perfect societies.
We have written extensively about philanthropic investments.
Without greater national momentum in support of these economic development principles, it is unlikely that Treasury revenue will increase to afford necessary costs. The US Treasury requires your service.
Without that greater national momentum, consider privately what you can do and personal commitments you can make, to 1) amass any wealth within your lifetime using valued skills, and 2) eventually sell everything you have, and 3) construct a model that might responsibly distribute the largest proportion possible to the broadest number of low-wealth people who want to work. Contact us to help you construct this economic development model.