MyGovCost News

One of the reasons federal spending has spiraled out of control in recent decades is that neither the public, nor the Congress, has any idea what the huge budget numbers really mean.

Per capita income in the United States now stands at approximately $33,070. It’s higher in most urban areas. In the Dallas-Fort Worth metro area, for example, the most recent figure from the Census Bureau, for 2009, was $39,514.

A couple earning two or even three times that amount—that is, about $79,000 per year, or even $118,000 a year—knows what they can afford to buy. They also know what they can’t afford to buy. And most people budget accordingly.

But this same couple has no idea what a trillion dollars will buy—let alone $3.5 trillion, the amount the federal government will spend in the 2011 fiscal year. There is no way for anybody—from the typical wage-earner in the DFW area to the chairmen of the House and Senate budget committees—to really comprehend such numbers.

There’s also another important reason for government’s out-of-control spending.

Read more here from the Fort Worth Star-Telegram.

Independent Institute Senior Fellow Richard K. Vedder, a member of the Council of Economic Advisors for the Institute’s Government Cost Calculator, was interviewed by International PressTV on January 12th. In the interview, Dr. Vedder explains that President Obama has done nothing to rectify either the U.S. or international debt crisis. Indeed, under the Obama administration, both have dramatically worsened.

Here is the article and interview.

The answer is illustrated below:

The United States’ total public debt outstanding was approximately $13.562 trillion at the end of the government’s fiscal year on 30 September 2010. As of 4 January 2011, the United States’ total public debt outstanding exceeds 14 trillion dollars.

Despite that near half-billion dollar increase, the percentage composition of who owns the U.S. national debt shown in the chart above is relatively unchanged. On the whole, U.S. individuals and institutions, when including the Social Security, U.S. Civil Service and Military trust funds own 62.2% of the U.S. national debt, while foreign nations own the remaining 37.8%.

Notes

“All Other Foreign Nations” are all those except China (for which we’ve included Hong Kong), Japan, United Kingdom, Brazil and “Oil Exporters.”

“Oil exporters” include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria.

The “U.S. Civil Service Retirement Fund” fund is the Federal Civil Service Retirement and Disability Fund. The “U.S. Military Retirement Fund” is the Department of Defense Retirement Fund. The “Social Security Trust Fund” is the Federal Old-Age Survivors and Disability Insurance Trust Fund.

Data sources:

U.S. Treasury Department. Monthly Statement of the Public Debt of the United States, September 30, 2010.

U.S. Treasury Department. Major Foreign Holders of Treasury Securities. (At end of September 2010).

Dr. Emily Skarbek, director of the Government Cost Calculator at the Independent Institute, was interviewed by International PressTV on Friday, January 14th. Listen to Emily as she explains the government’s three options on this gigantic debt crisis: pay the debt, maintain it, or repudiate it.

The article and video can be viewed here.

In this new article on the continual spending and stretching of the budget, Dr. Emily Skarbek explains the temptations for the new Congress to spend wastefully and heighten the debt ceiling. Equating Congress and the ever-expanding budget to over-eaters, Dr. Skarbek says that small intervals of “another ten pounds” are causing an extreme obesity crisis for the U.S. financially:

The question that will haunt America for the next several months is whether the new 112th Congress has the will to trim back the unsustainable excesses to which Washington has become accustomed or will fall back into old, unhealthy habits.

Every representative must wage battle between personal desires and the will to make responsible decisions. But the road to discipline is fraught with temptation.

The first test will be raising the statutory limit on the amount of money the government can borrow. Even before the new Congress was sworn in, Austan Goolsbee, chairman of President Obama’s Council of Economic Advisers, was warning that failing to raise the debt limit—now $14.3 trillion, or more than 95 percent of last year’s Gross Domestic Product—would be “catastrophic” and pure “insanity.”

Goolsbee’s cries to loosen the belt on the already obese federal budget sounded much like the excuses overeaters use to avoid changing their habits. “Just a few more cookies. . . . I’ll work myself into those skinny jeans tomorrow.”

Goolsbee certainly is not the first to want to delay self-denial. Since World War I, when the Second Liberty Bond Act of 1917 placed a statutory limit on government borrowing, Congress has increased the debt ceiling more than 70 times. But each increase, like those additional cookies, has made it more difficult to stop and has helped hide the fact that we face ruin if the overindulgence continues.

Unfortunately, what has been a relatively benign problem until recently...

For the full article, please click here.

Dr. Emily Skarbek, director of the Government Cost Calculator at the Independent Institute, was interviewed by International PressTV on Friday, January 7th. Listen to Emily as she discusses how poor U.S. government policies create or exacerbate unemployment.

The article and video can be viewed here.

As many Americans prepare to face those well-intended, but oft-abandoned New Year’s resolutions, what changes in resolve should the new 112th Congress be targeting? We prepare to close the books on the 111th Congressional agenda, but now what? In this exclusive MyGovCost.org Policy Analysis, economist and creator of the Government Cost Calculator, Craig Eyermann, tells the new policy-makers to “aim at the zero deficit line.”

Aim at the Zero Deficit Line by Craig Eyermann (PDF)

MyGovCost Director Emily Skarbek was a guest on KMED Radio with Bill Myer on Friday, December 17th to discuss the potential financial fall-outs from the latest tax-cut legislation and the importance of personalizing these policies for a clearer understanding of our fiscal conditions.

FoxNews is reporting that the latest legislation has produced more favorable forecasts from many economists. Analysts predict economic growth could come in close to 4 percent next year and the payroll tax cut will give American workers extra cash to spend.

And “spending” is exactly what Americans are doing, as the clock ticks down to just 48 hours before Christmas Day.

For the final three months of this year, analysts predict consumer spending rose at an annual rate of up to 4 percent. Still, consumers would have to double that pace to match the spending rate recorded in the spring of 1983, after the 1981-1982 recession. That pace helped the economy grow at a rate of 9.3 percent and lead the country to a recovery.

Stay tuned to Director Emily Skarbek and MyGovCost.org for the latest developments on the economic pendulum swing and check-in on your personal cost calculations to stay on top of how Washington’s dealings will impact you in this coming new year.

On Monday’s Freedom Watch on Fox Business Channel, Judge Andrew Napolitano asks Steve Forbes about regime uncertainty created by Congress and the changing tax system. Independent Institute Research Fellow Benjamin Powell advocates deep spending cuts and making the temporary tax cuts permanent.

Then, in the next segment, Judge Napolitano and Dr. Powell critique the new $4.5 billion Nanny State, federal law (“Healthy Hunger Free Kids Act of 2010″) pushed by Michelle Obama that funds and mandates the foods to be bought and served in public schools. According to Ms. Obama, “We can’t just leave it [food] up to the parents.” Check it out!

In an article at OneNewsNow.com, “I’m going to pay how much in taxes?”, Chris Woodward has recommended the Government Cost Calculator at MyGovCost.org:

What is Washington’s spending costing you? A new website aims to answer that question.

The website MyGovCost.org is an online calculator where taxpayers can learn what they will pay in taxes for federal programs. In addition, users can learn how much money they could have if they were able to invest that money instead, and how their payments compare to what Washington is spending regularly.

Dr. Emily Skarbek is a research fellow with The Independent Institute, which oversees the website. “When you come to MyGovCost.org, it just asks that you put in your age, income, and approximate education level,” she shares. Most users, she adds, will find the results “quite shocking.”

According to Skarbek, the information is adjusted regularly to allow taxpayers an exact figure. “We update the data in relationship to what is put out by the [Congressional Budget Office] and the [Office of Management and Budget] so that it would reflect any changes in spending initiatives,” the researcher explains.

And while current taxpayers can use the website to get an idea of their financial tax burden, they can also see what their children might pay under the present conditions.