Jun 082014
 

Here’s an attempt at a non-partisan examination of the US debt problem. Do younger voters really understand just how big a burden is being placed on them by government obligations? I’m not completely happy with the comic – the dialogue and timing are a bit clunky – but it gets the point across.

You are welcome to post this wherever you like, but please add a link back to this site.  You can download the comic in PDF form here.

 Posted by at 6:04 pm

  9 Responses to “Adventures in Debt”

  1. Brilliant!

  2. New Zealand is lovely any time of year – except for the 20% income tax rate for the lowest tax bracket and 12.5% sales tax.

  3. While accurate, this money does not necessarily have to get repaid in the lifetime of these students, so this is a bit overblown. The US economy (properly run, which is not how things are now) can maintain a debt load 30-60% of GDP without economic calamity. As GDP grows, the US capacity to hold debt grows. However, we are not on that track right now. Look at this graph to see what has happened historically:
    http://visual.ly/united-states-debt-percentage-gdp-1940-2012

    Your last panel only hints at the future obligations of the state and fed government (medicare, social security, pensions, etc).
    This report suggests that the federal obligations may be 3x larger than the existing debt this comic refers to.
    http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/Federal/us_fed_Election_Series_DEBT_010612.pdf
    And this report shows that the states also have massive debt
    http://www.nationalaffairs.com/publications/detail/the-states-in-crisis

    Pray that our children have the sense to stop the growth of government and let the economy (GDP) grow (which will bring in greater revenues). Neither republicans nor democrats have shown the political will to do that so far.

    • Thanks very much, these are great links. Actually per your first link, with debt at 100% of GDP we really are in a position where federal debt matters as much as personal debt. Just look at Argentina, Greece, etc. One jump in interest rates and we are toast. And the states’ shares of debt just adds fuel to the fire.

      And totally agree its a bipartisan issue with both parties at fault.

  4. Of course, even if those students DO leave the country, until they renounce their US citizenship the IRS will still be going after them at some point, and even after the renunciation they’re still on the hook for the expatriation tax enacted in 2008 by the Heroes Earnings Assistance and Relief Act.

    From http://en.wikipedia.org/wiki/Renunciation_of_citizenship#Taxation :

    Effective June 2008, U.S. citizens who renounce their citizenship are subject under certain circumstances to an expatriation tax, which is meant to extract from the expatriate taxes that would have been paid had he remained a citizen: all property of a covered expatriate is deemed sold for its fair market value on the day before the expatriation date, which usually results in a capital gain, which is taxable income.

    • Yep, they’ve got you coming and going. As a longtime expat I learned that US citizens are required to file taxes no matter where they live. There is a credit for local taxes paid, and filers can exclude the first $95,100 in earnings per year, which should cover most of our newly-graduated protagonists’ income. So depending on relative tax rates – and expected changes to pay national debt levels – they might still be better off in Kiwiland.

      • I hadn’t thought about there being exclusions (not having any desire to leave the US even if I had the resources for it, looking up the details wasn’t exactly in the front of my mind), but now that you have mentioned it I suppose that makes sense.

Leave a Reply