- The Federal government national debt is rapidly approaching $22 TRILLION.
- The unfunded liabilities of the Federal government, basically debt that has not been incurred yet but which is going to incur, for Social Security and Medicare, is estimated to be $82 TRILLION over the next 30 years, per the Congressional Budget Office.
- State governments’ unfunded pensions and other liabilities is about $6 TRILLION, per the American Legislative Executive Council.
- Detroit, Michigan, Stockton and San Bernardino in California, and other city governments have already gone bankrupt because of debt.
- Chicago for all intent and purposes in bankrupt.
- Four states, California, Illinois, New Jersey and Connecticut are frantically racing to see what state will be the first one to go bankrupt since none of them have a path that would prevent them from not going bankrupt.
The Heritage Foundation recently ran an article by Jack Grant that updates some of the most dire statistics and realities as it concerns government debt in the country day, “8 Years After the Tea Party Wave, Congress Still Spends Like There’s No Tomorrow:”
- An organization known as the Committee For A Responsible Federal Budget recently released its budget analysis titled, “The 75 Year Budget Outlook.”
- Their findings are not optimistic for the future of the country, the Federal government, and our democracy.
- The Federal Reserve Board has been raising interest rates recently as the U.S. economy gets stronger and stronger.
- While this is a good sign for the short term economic outlook, as interest rates rise the interest payments on existing and newly created debt by Washington politicians will increase the cost of serving that debt in the future, adding to the Federal deficit.
- At the going rate of Federal government spending, annual trillion dollar deficits are likely to occur sooner rather than later, reaching the magic trillion dollar deficit mark that the Obama administration hit four times during its spending heydays.
- According to that Committee for a Responsible Federal Budget report, they estimate that in 75 years just the annual Federal government debt interest payments will rise from 1.6% of GDP today to an out of control 14.9% by 2093.
- In other words, almost 15% of the entire economic output of the United States will be needed to service the Federal debt.
- This 14.9% will not likely be reached because the Federal government will likely go bankrupt long before this happens.
- By 2093 the Federal debt will be a whopping six times the size of the whole economy/GDP if no changes are made to current government policies and budgeting practices.
- The Congressional Budget Office has an alternative long range fiscal forecast that varies assumptions but which lines up with this forecast, finding that under current Federal government policies, the national debt could exceed 600% of the economy by 2093.
- According to the report, four major Federal spending categories, the Highway Trust Fund, Disability Insurance Trust Fund, Medicare Trust Fund, and Social Security Trust Fund will go bankrupt, without major changes made to their funding, by 2021, 2025, 2026, and 2032 respectively.
- But as readers of this blog know, these funds are already for all intent and purposes bankrupt, e.g. Social Security went cash flow negative a few years ago, i.e. they were paying out more than they were taking in, and thus, needed to raid the general income funds of the Treasury Department to stay solvent.
- The four bankruptcy dates above are simply the years that those funds officially go broke from an accounting perspective.
- We are heading down a fiscal path that cannot be sustained.
- Things are worse than they appear from an official government accounting perspective.
- The above report and discussion does not include that dire economic and fiscal conditions of many, many other state and local government entities.
- You cannot fix the problem by raising taxes on only the rich, the second post listed above proved how stupid and doomed that strategy is.
- You cannot fix the problem by trimming around the edges of government spending, massive changes have to be made to the major government entitlement programs, Social Security, Medicare, and Medicaid, including benefit reductions and increased taxes, and entire nd mostly useless government departments need to be eliminated with our starting recommendations being the departments of Commerce, Education and Energy, low performing and unnecessary entities.
- Every Federal government entity would develop and go about executing a ten year plan that would reduce its spending by 5% a year until it got down to half of its current budget size.
- Hundreds of times we have shown examples of purely wasteful Federal government spending (e.g. remember when the National Science Foundation spent half a million dollars to develop a video game that simulated high school prom week!), there is massive amounts of wasteful spending that could be easily cut with no economic harm to any American.
- Criminal fraud would be a top priority to be weeded out of every major government program, with Social Security and Medicare being the biggest targets, since according to multiple sources they easily lose tens of billions of dollars every year to incompetence and criminal fraud.
- Millionaires, over a to be determined threshold, and all billionaires in this country would no longer receive Social Security and Medicare benefits, they can afford to do without and those funds can be used to offset the inevitable cuts to the benefits of other, less wealthy recipients.
- The cap on earnings subject to Social Security and Medicare taxes should be lifted to bring some additional funding into those programs.
- The age of retirement for those that can afford to wait because they are financially well off should be raised to take some of the pressure off of the programs that support retirees.
- And it is probably unavoidable that all Social Security and Medicare recipients will need to take a cut in benefits in order to resolve this national debt problem, the only question is how large a cut needs to be taken, the longer the delay the bigger the cuts.
But as the Heritage article points out: “It’s impossible to predict when the massive national debt will bring about a fiscal disaster. There are incredibly smart people who disagree with each other on when it will happen. Yet all but a few would agree that this level of debt is unprecedented and is something that no nation has ever endured.” The debt implosion is going to happen the only two questions that exist are 1) when will it happen and 2) how severe will it be with the guarantee that the longer we wait to address it, the more severe the consequences will be.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
www.loathemygovernment.com
It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w
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