19 Apr 2013

US taxpayers have handed 3.7% of US GDP to the financial sector in interest payments since 1988

Just in case you thought that the 3% of GDP that Eurozone governments hand over to the Financial Sector in interest payments on Public Sector Debt, and the 3.2% of GDP paid by UK taxpayers is unusual, here are the numbers for the USA.

I'd already commented on the fact that the total amount of taxpayers money handed over in interest payments was a staggering €8.58 trillion since 1988 - i.e. well over half of the entire national budget deficit. But here, I wanted to know how the figures for the percentage of GDP compare.

As you can see, the average value is 3.67% over the period. There are actually signs that the greed of the markets has dropped a bit recently because it has indeed dropped from a peak of 4.82% in 1991 to only 2.38% last year. But the $360 billion of taxpayers money handed over in 2012 is still one hell of a lot to pay. Especially when you realize that (a) the US Treasury could have generated the money free of charge, and that (b) the Banks who have been lending "money" to the Government can create the money they lend out of thin air.

Methinks it's time to change the system. The idea that it can be normal to hand over 3-4% of GDP in interest charges to the Financial Sector simply cannot be defended.

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