YOU OWE $68K
By: Curtis Roe, Director of Finance, Purcell Murray Company, firstname.lastname@example.org
It’s a new day and we are further in debt as a nation! $22 trillion according to usgovernmendebt.us. Allocated on a per person basis, that’s almost $68k for each of us. The budgeted forecast for the interest for 2019 is $364 billion. That’s 8.2% of the national budget. In 2015 the debt expense was 6% of the national budget. Yet, it still feels like Christmas when I see the news about all the wonderful things that are discussed that we can and should get for free. More housing. A wall. A bullet train. More help with child care. Free college and health insurance. Imagine what we could do with an extra $369 billion if we weren’t paying interest expense. Did you know that the country of Venezuela’s GDP for 2018 was $320 billion? GDP is the sum of the goods and services provided over a year. Maybe Venezuela is not the best comparison right now but I would appreciate it if our governmental representatives would look more closely at this issue of our national debt. If we aren’t careful, we may see folks get some of the Christmas goodies, but they won’t really be free. They will get stacked onto the debt.
In the mean time, this is the time to get your personal taxes done. We have a lot of time left and getting into it now will certainly reduce the possible stress coming up this April In case you don’t yet know, there are new limits on the itemized deductions we can take against federal income for state taxes and mortgage interest. Last year I received a nice refund but it looks like I will owe this year. I didn’t make any changes to my withholdings. April 15 falls on a Monday this year. Does that mean we will all be scrambling over the weekend?
I have to say that I am not very happy about the limit on the deductions we can take for state tax and mortgage interest. Given the median price of homes in our area, there are a lot of us in this boat. But at the same time, there is some logic to it. In the past, California could raise its’ taxes. The tax payers would pay more to the state but they also had a reduction of their taxes paid to the federal government. It was almost like taking money from the Fed.
But wait, the state debt is about $156 billion. The state budget for total spending this year is $197 billion. 3% of our budget is for interest expense.