Dakota Beacon

The Average American Family

A dual-income family of four that earned $70,000 in year 2021, had $70,000 in mortgage and auto debts, paid $1,056 in interest on the debts, paid $20,400 in federal income tax, and paid $3,824 in state income tax, leaving $44,720 or 63.8% net spendable income after paying debt interest and taxes. Annual health insurance, food, and transportation expenses were $22,221, $8,289, and $10,961 respectively, totaling $41,471, leaving $3,249 or 4.6% of annual earnings ($270.75/month) to spend on other family needs, including schooling, various repairs, clothing, heating & air conditioning, household items and entertainment.

By year 2024, interest on debt will increase to $2,217 and by year 2033, interest on debt will increase to $4,200.

The median household income of the United States in 2021 ($70,784) was very near the number referenced above.

How would you like to be living in that family with no savings set aside for retirement?

The United States Government

If you divided all of the numbers above by three and multiplied by one billion, you would arrive at the fiscal condition of the United States Government in 2021.

Let’s review the numbers for year 2021:

Gross Domestic Product = $23.315 Billion

Federal Debt = $23.222 Billion (99.6% of GDP)

Interest on Federal Debt = $475 Billion

Federal Income tax collected = $4,100 Billion

State and local income tax collected = $1,275 Billion

World Bank Economists claim that Debt to GDP ratios above 77% negatively affect economic growth of a country.

Historic Debt

At the end of World War II, in 1946, our national debt was 119% of GDP

At the height of the Covid-19 Pandemic, in 2020, our national debt was 129% of GDP

After the Inflation Reduction Act, in 2022, our national debt was 123% of GDP

What is coming?

The first half of 2022, GDP growth was negative or in recession

The third and fourth quarter 2022 GDP growth rates were 1.9% and 2.6%

The first quarter 2023 GDP growth was 1.1%

Another recession appears to be eminent. The question on economists’ minds is “How deep a recession will it be?”

What can everyday Americans do?

We are far beyond the point where any federal tax increase may improve our national fiscal condition. High-income earners are now filing for unemployment benefits at a record pace. As a minimum, we can ALL request that members of the US House, US Senate, and our President take action to freeze the current debt limit by cutting expenditures.

Well-to-do Americans have already taken action to protect themselves from irrational actions of our legislative and executive branches; you may not have the wealth to protect yourself economically but you do have a telephone with which to call your representatives in Washington DC.

Love = Work + Courage