Deficit Will Cost $15,000 per Household?

If the stimulus plan is passed, the U.S. deficit will approach $1.7 trillion dollars.  Whatever the economic benefits of the plan, the cost of the plan will eventually need to be paid back.  Whether this payment comes in the form of increased taxes on consumers and/or business, because businesses will pass these costs along to consumers in the form of higher prices, ultimately consumers will foot the total bill.  Since there are about 115 million households in the U.S., the cost per household will average $15,000.  What is being described as an economic stimulus could leave American families facing a significant financial burden.

FacebooktwitterredditlinkedinFacebooktwitterredditlinkedin

2 thoughts on “Deficit Will Cost $15,000 per Household?

  1. But, um, the really interesting thing is which demographic groups will have to pay more, and which less of the $15,000.

    Here are some ways to look at this:

    –in terms of the absolute amounts: a $5,000 cost vs. a $30,000 cost household.

    –in terms of the proportion of household income involved. That is, if a single earner family earning $250,000 a year pays $30,000, while one earning $35,000 with two people working pays $15,000, the absolute amounts don’t tell the full fairness story.

    — in terms of formerly expected governmental services that can’t be implemented for bugetary reasons, vs, actual out of pocket costs. If entitlements are cut back more than previously planned, those who formerly anticipated receiving them may not be paying in absolute terms, but they lose significant ‘shadow’ wealth, and where this involves medical and supportive care, their children’s real burdens may be increased to compensate for the unplanned for losses. This has to be added to the latter’s per household costs.

    Historically, financial crises do tend to dramatically increase the indebtedness of governments. There seems no way to get around this. The politics then, will be not about whether or not to spend, but around which groups can be made to pay more and which less.

    Boomer political clout is waning. My probably over-cynical guess is that broadly, younger generations will try to shift the price onto the boomers without making it too obvious to the latter what is happening until it is too late to do much. And the Boomers will fight to shift the payback into the distant enough future that they’ll be dead before the pain really hits.

    I won’t even go into richer and poorer.

    It ain’t gonna be pretty, one fears. One hopes that some shreds of intergenerational and income level equity can be maintained.

  2. Type your comment here.
    ——————————————————
    When calculating a cost per household for a local sales tax, how does one take into account the goods that are sold to customers from outside the taxing jurisdiction which have embedded in their price the sales taxes paid by the people who made the product?

    Thanking you in advance,
    Barry Klein
    Houston

Comments are closed.