The CARES Act of 2020, the Consolidated Appropriations Act of 2021 and the newest American Rescue Plan of 2021 will spend approximately $5 trillion. In less than one year, our country is printing money and extending the national debt by a mind-blowing figure.
I am going to write out the numbers below because seeing the zeros is important. It is so easy to throw around words that represent the numbers, but once you see the numbers it gives a magnitude of size. The word “trillion” does not do the number any justice.
The American Rescue Plan is going to cost every American just less than $6,000. The amount of money that is going directly to citizens between all three of the above acts is approximately half of what is being spent by all Americans for just the most recent American Rescue Plan.
Are we going to be hit by massive inflation with the printing of the money to pay for these acts? If so, what will that do to your savings and investments?
We are talking about trillions of dollars and that number is just so vast. How can someone who makes $60,000 a year understand it?
Let’s say someone works from the time he is 20 until he is 65 years old. Although a 21-year-old being paid $50,000 a year to start is a stretch, let’s use that number anyway. In the span of 45 years, the worker will have made $2.25 million. To cover the cost of these acts we need more than 2,222,000 workers to pay every penny they make over 45 years of working.
Someone who makes $60,000 per year would need to work more than 83.3 million years to pay off the cost of the acts. With an average American lifespan of 79 years you’d have to spend 1,054,852 life spans working every year from birth to death.
These acts spend money in addition to the annual budget. In 2019, the federal government spent $4,400,000,000,000. The revenue for 2019 was $3,500,000,000,000. Using some rough numbers, if we figured the same amounts for 2020 and 2021 and add the cost of the Acts here is what it looks like: Spending is $13,800,000,000,000 with revenues of $7,000,000,000,000. That is nearly a 50 percent deficit.
I understand all these numbers are huge, but it is important to see all the zeros to get an idea of how much trouble we may be getting ourselves into with the printing and spending of money we do not have.
The population of America is just less than 330 million people. 143.3 million Americans paid taxes in 2017. These three acts are adding a tax burden of just under $35,000 per taxpayer. If we look at the total spending in 2020 and 2021, as approximated above, each taxpayer would have a tax burden of $48,150 per year! How is this sustainable?
Some people have spoken negatively about the newest $1,900,000,000,000 act. If every single American paid $5,800 we could afford this act. From that payment, each American would receive $1,400 in return. So, this act is still going to cost every American $4,400. But because less than half of Americans pay taxes, as shown above, the actual tax burden on the taxpaying citizen is more than $13,000 each. Again this only covers the most recent act. This does not include the regular 2021 taxes that cover the normal operations of our federal government. This also doesn’t include the CARES Act or the Consolidated Appropriations Act.
If this doesn’t make you nervous about inflation and the long-term damage to your life savings, you’re not paying attention.
Scotty Anderson is a computer programmer who enjoys serving the community through various community-oriented service jobs.