OAKLAND, Calif., August 30, 2010The Congressional Budget Office expects our national debt to surpass $23 trillion by 2019. In fiscal year 2010 alone, federal spending will reach $3.5 trillion. The numbers are unprecedented and yet the experts are not optimistic that we will reestablish economic solvency any time soon. So what does this mean for you?
To personalize the impact of these figures, the Independent Institute will launch a Government Cost Calculator at MyGovCost.org on August 31, a new web site directed by economist and Research Fellow Emily Skarbek. The growth in federal budget expenditures and spending initiatives is increasingly burdensome on all taxpayers, said Skarbek, also Assistant Professor of Economics at San Jose State University, California. Most people have a hard time understanding what the true value of their tax dollars would be if invested and saved for the future. MyGovCost.org is an easy-to- use tool that provides an understanding of how government spending directly impacts you.
The web site features a unique calculator developed by Institute economists that shows how much any taxpayer will contribute to various federal programs per month, per year, and over the course of his or her lifetime. The formulas involved draw on data from the U.S. Bureau of Labor Statistics, U.S Census Bureau, and Congressional Budget Office. At MyGovCost.org, users can input age, education level, and income to immediately receive a tailored forecast of the liability they stand to bear for major federal programs like Social Security and Medicaid, as well as recent spending packages like the bailouts and TARP.
To further illustrate the enormity of the burden, MyGovCost.org will also provide the user with the estimated amount that could have been generated had his or her federal costs been privately invested in the stock market instead. For example, a recent college graduate earning $35,000 a year will pay on average $13,764 in annual taxes, amounting to a lifetime tax burden of $789,092. If those dollars had been otherwise invested instead of being sent to Uncle Sam, that same college graduate could have earned an additional $4,548,002.
Knowing the true cost of federal programs allows taxpayers to judge whether Congress is spending their money effectively, said Skarbek. Moreover, taxpayer awareness of federal spending creates a more transparent environment for new and existing legislation.
Check out the blog at MyGovCost.org to stay current with news and commentary from Dr. Skarbek and other Independent Institute economists.