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What would the new US Federal Debt Limit be?

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July 28 (DP.net).─ The US budgetary crisis is not about increasing the Debt Limit, which everybody knows on both sides of the dispute that cannot be avoided under the present circumstances, but about budgetary controls on excesive government expenses and waste and a possible bipartisan agreement about a tax code reform.

The problem is that the Federal Debt has shoot-up disproportionally as compared with Gross Domestic Product during the last three years or compared with the ability of the nation to cover the debt service and recover from recession.

Furthermore, the Federal Debt, as it stands now, is a heavy burden for taxpayers. Increasing the statutory limit on the debt from $14.294 trillion to $16.7 trillion would give the Treasury Department the additional money it needs to keep borrowing through the 2012 elections. It would be the fourth time the debt limit has been increased since February 2009.

 

The problem for taxpayers is that such a huge debt is becoming unsustainable when economist factor the share of responsibility each citizen and resident must bear. The pie chart highlights the share of total federal income tax paid by each income bracket. For example, taxpayers earning $55,000 pay 18% of the all taxes collected.

 

2011 Chart on Relative Tax Burdens2011 Chart on Relative Tax Burdens

The burden is very heavy for people in the lowest bracket of the so called "middle class". Factoring family income at a modest $40,000 per year, their share is $27.237.22. For a family of 4 earning $75,000 per year, their share is a whooping $73,295.23. The projections are based on many assumptions with respect to future income groups, future tax burdens, future federal revenues by source, and other details and they may change according to changing circumstances and new government policies.

© Democracia Participativa / Participatory Democracy