The federal debt now tops $12 trillion. That’s a 12 plus 12 zeroes. You would have to earn a million dollars a year for 12 million years to accumulate that much money. $12 trillion also works out to $87,000 for every U.S. worker (as of Oct.)
North Carolina has a bit of a debt problem of its own. Why is government debt so important? As I wrote in my report:
…because government debt and liabilities represent inevitable tax increases, they serve as a de facto lien on the productive value of property and capital equipment. Entrepreneurs evaluate the worthiness of such investments based on their anticipated after-tax return. As such, expected higher future tax rates will depress the value of these resources and cause entrepreneurs to refrain from productive investment. The result is slower job and income growth than otherwise would have occurred.
Repayment of state and local government debt also represents a transfer of wealth from the private sector to the government. Private sector wealth that could have been used for productive investment (i.e., toward future job growth and income gains) is consumed by nonproductive government debt service.
Consequently, (government debt) represents countless factories that will not be built, businesses not started and jobs never created.
But the national debt is small potatoes compared to the $107 trillion in unfunded liabilities for Social Security and Medicare. How much of our future time and effort will be confiscated by the government to pay down their vote-buying schemes?