Submitted by F.F.Wiley of Cyniconomics blog [6],
Earlier this week, we followed up the CBO’s publication of its 2013 Long-Term Budget Outlook [7] with a chart [8] that we believe should have been included.
But what would Rick Santelli say?
Only Rick would think to mix our debt projections with cheeseburgers and a magnifying glass. Here’s his entertaining take on our chart:
Now, some people may wonder whether we can “grow” into debt burdens of hundreds of thousands or millions of dollars per taxpayer. This may have been where CNBC’s Kelly Evans was going when she questioned Rick about GDP at the end of his piece. I’ll add a few thoughts on that.
First, the inflationary piece of any growth doesn’t help. We’ve neutralized inflation in the chart by using the purchasing power of today’s dollar throughout the projection, per the CBO’s own inflation forecasts.
Second, real growth only helps to cover your tax bill to the extent that it’s boosting your income. And one way to look at the typical taxpayer’s income is to use Census Bureau data. Here’s a full history of the Census Bureau’s figures for median household income:
[9]
Notice that median household income in 2012 is below the 1989 figure. That’s 23 years with no growth, whatsoever.
Or, another way look at it is this:
- Median household income has increased by a cumulative, grand total of 11% in the last 37 years (from $45,788 in 1975 to $51,017 in 2012).
- Based mostly on CBO projections for the next 37 years, we’re showing the national debt per taxpayer jumping by 532% (to $881,072 in 2050).
That’s 532% versus 11%.
I don’t know about you, but I’m not too confident that incomes (Rick’s tiny cheeseburger) will keep up with the tax bills (the enormous burger).