Friday, February 7, 2014

The Phantom Debt That No One Will Talk About

This is a chart I put together to illustrate the total government spending both Federal and State/Local. Notice that State and Local spending are about as much as Federal spending. All of our governments spend annually $6 Trillion.
In 2013 the Federal and all States/Local governments collected in tax revenue an estimated $4 Trillion.
In 2013 the Federal and all States/Local governments spent $6 Trillion (as indicated in the chart).
This leaves a combined Federal and State/local deficit of nearly $2 Trillion for 2013 and this has been going on since the 2008-9 market crash. Everyone talks about the Federal deficit but ignores the combined State/Local deficits.
Things are getting a little better for some states but ObamaCare can be the fly in the ointment that could send all of our states and local governments into a fiscal tailspin.
As our economy continues to bump along at a weak 2% to 3.5% GDP, anything can happen as the phantom debt accumulated by State and Local governments continues to mount.  – N.P.Contompasis

                             2012       2013        2014

 Federal Spending   $3.5     $ 3.5      $ 3.8
 State Spending       $1.5     $ 1.5      $ 1.5
 Local Spending       $1.7     $ 1.7      $ 1.7
 IntergovSpending  $ -0.5    $-0.6      $-0.6
 Total Spending        $6.1   $  6.1      $ 6.4
*All dollar amounts in rounded Trillion dollars.

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