The US government quietly added $200+ billion to the debt this month alone.

by Simon Black, Sovereign Man:

There’s been something happening this month that very few people have noticed.

It’s been lost beneath all the other headline-dominating news, from the Las Vegas shooting to Harvey Weinstein to the Mueller investigation.

But very quietly behind the scenes there’s been an extremely rapid uptick in the US national debt.

In the month of October alone, the US national debt has soared by nearly a quarter of a trillion dollars.

This is pretty astonishing given that October is supposed to be a ‘good’ month for the US Treasury Department. The tax extension deadline means that October is usually quite strong for federal tax receipts.

And it has been– taxpayers have written checks totaling $190 billion to Uncle Sam so far this month.

Yet despite being flush with tax revenue, the US government still managed to pile almost a quarter of a trillion dollars more on top of its already enormous mountain of debt.

It’s always surprising to me how a story this monumental never receives any coverage.

The government of the largest, most important economy in the world is completely, woefully bankrupt. And its rate of decline is accelerating.

You’d think this would be on the front page of every major newspaper in the world.

But it’s not. It’s shrugged off as par for the course, as if accumulating historic levels of debt is somehow consequence-free.

And this complacency is what I find the MOST bizarre.

Consider the following: the US government spends nearly the ENTIRETY of its tax revenue on Social Security, Medicare, and Interest on the Debt.

Throw in national defense spending and the budget deficit is already hundreds of billions of dollars.

And that’s before they pay for anything else within the federal government: The Internal Revenue Service. National Parks. Highways. The guys who graze your genitals with the backs of their hands at the airport.

Congress could literally cut almost everything we think of as ‘government’ and they’d still lose hundreds of billions of dollars each year.

Oh, and raising taxes doesn’t solve this problem.

Over the past eight decades since the end of World War II, tax rates in the United States have been all over the board.

The highest marginal tax rate on individual income has been as high as 92% (in 1952-1953) and as low as 28% (1988-1990).

The corporate tax rate has gyrated between 53% and 34%. Capital gains rates have been as high as 35% and as low as 15%.

Yet throughout it all, overall tax revenue as a percentage of GDP has barely budged.

This is how governments measure tax revenue– as a percentage of the overall economy. It’s like measuring how big a slice of the economic pie ends up in the government’s pocket.

And that figure has barely budged for decades.

The US government’s tax revenue as a percentage of GDP is almost invariably around 17%, i.e. roughly 17% of all US economic value is paid to the federal government as tax revenue.

It doesn’t matter how high (or low) tax rates are set. Tax REVENUE stays the same.

So even if they jack up tax rates back to 90%, IT STILL DOESN’T SOLVE THE PROBLEM.

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