U.S. annual revenue for the last 40 years and the growing total Federal debt.
New website page: Quick-links to helpful data. National debt numbers as of yesterday, amount paid in interest for national debt each month/year, average interest rate on national debt, U.S. budget allocations, history of GDP, monetary base chart, how much we owe foreign nations, SS worker to beneficiaries ratio history, food stamp numbers, who pays taxes, helpful articles, video, plus much more…
Let me illustrate what I mean by the point of no return.
Years ago, my family visited Niagara Falls. Like many tourists, we watched the movie at the welcome center about the Niagara River and the famous falls. The movie explained that if you are traveling down the Niagara River toward the falls, you will see a sign that says, “Approaching the Point of No Return.” After you reach a specific point in the river, you will see a sign that reads, “The Point of No Return.” If you go beyond this point, it is certain that you will go over the falls because the force of the river’s current is so powerful that it is impossible to turn around, no matter how hard you try. Beyond the point of no return, gravity and physics overrule good effort, good intentions, and desire. And if you know anything about the Niagara River, you know that going over the falls is some-thing you do not want to happen!
What is the lesson? Take note of early warning signs, because at some point it will be too late.
The data in PREPARE documents we are in the river and headed downstream.
Based on my analysis, I believe the warning signs indicate that we have a small window of opportunity before our nation reaches the point of no return economically. More information becomes available every day, so the timeline can change for better or worse at any time.
Once we reach the point of no return, powerful, negative economic forces such as interest payments on the national debt, growing entitlement spending (Social Security, Medicare, Medicaid), and deficit spending,
will consume such a large portion of federal revenue that it will be mathematically impossible to recover from these mounting negative economic forces—regardless of whatever heroic efforts are tried.
This point is important enough that it bears repeating: Once we reach the point of no return, it will be mathematically impossible to recover. Please read carefully what I am saying so there is no misunderstanding. I’m not predicting we are going to have a financial crash in 20XX. (Even when you reach the point of no return, you are still in the river for a period of time before you go over the falls.) However, I am saying that the evidence supports the conclusion that if we do not lower spending and stop growing the national debt in the next few years, we will be past the point of no return because it will become impossible to raise enough revenue to pay for our growing obligations.
Your PREP Plan:
- Stay informed -sign up for my free email updates
- Put your financial house in order
One of the most helpful lessons I learned in my research was understanding the historical relationship between GDP (Gross Domestic Product) and federal revenues as a percent-age of GDP. For example, in 2008, federal revenues were $2.5 trillion and GDP was $14.2 trillion; therefore, revenue was 17.61 percent of GDP ($2.5 trillion ÷ $14.2 trillion = 17.61 percent).
Over the past forty years, the amount of federal revenue as a percentage of GDP falls within a narrow band between 14.9 percent and 20.6 percent. The forty-year average is 17.79 percent.
Note the forty-year average of 17.79 percent is during years of high and low individual and corporate tax rates.
The mother of economic storms is headed our way, yet most Americans seem oblivious to the danger. Despite the gathering thunderclouds of annual federal budget deficits and a rapidly escalating national debt, most people are simply ignoring the news and information concerning the coming economic crisis. There’s really nothing complicated about it. You only need one chart to illustrate our nation’s unsustainable course.
YOUR PREP PLAN: Put your smart phone or iPad to work.
- If you have a smart phone – click here – and create an icon on your phone home screen.
- When the topic of the economy comes up – pull out your phone or ipad – click on the icon and show them the charts.
So what do you think? Join the conversation. Leave your comment or ask a question.