Deficits, Interest, and Taxes

Hilzoy writes:

In honor of April 15 and the delights of paying taxes, I thought I’d post some simple figures from the Treasury Department’s figures for FY 2006. All figures are in billions of dollars.

Total Receipts: 2,407
Total Outlays: 2654
Total Deficit: 248

Total Spent On Debt Service: 405.9

— Yes, that’s right: had we simply paid our bills on time, more or less, we would not only not be running a deficit, we would have $157.9 billion dollars to either refund to taxpayers or spend on some new program.

Three dots

Debt Service as a percentage of receipts: 16.9%

Yes, that’s right too: about one in every six dollars that we pay in taxes goes to pay not for anything useful, like fixing bridges, but for debt service.

A few minor quibbles… the deficit figure is the figure including the Social Security surplus. The other thing is… the interest on the debt is not just a matter of us paying our bills on time – its a matter of us previously paying our bills on time. Put another way… the interest we’re paying now is a consequence, in part, of Reagan’s deficits as far as the eye can see. Those who whine about taxes – get used to it. You’ll be paying a lot more because GW cut tax rates and increased spending back in 2001.