Spending our way to financial ruin (each American household owes $455,000 for entitlements)

San Francisco Examiner ^ | 12/22/07

[Libloather]

Spending our way to financial ruin
Dec 22, 2007 6:00 AM (4 hrs ago)
The San Francisco Examiner Newspaper

SAN FRANCISCO - It is no coincidence that U.S. Comptroller General David Walker’s latest warning that the United States is literally spending its way into bankruptcy came the same week Congress passed a 3,416-page omnibus spending bill that no senator or representative will read. Walker’s warning is made all the more urgent because Congress — aided and abetted in many respects by the president — continues to pass massive spending bills with no idea of what’s contained in them.

The federal government is already on the hook for $53 trillion in Social Security, Medicare and other entitlement benefits that it can’t pay for unless it raises taxes to levels that will put America into a financial Stone Age.

In releasing the federal government’s 2007 financial report at the National Press Club earlier this week, Walker noted that each American household owes $455,000 for these entitlements — almost five times the net worth of the median American family. Just imagine having to pay a $455,000 mortgage but not being able to live in the house. Such a crushing debt load puts the nation “on an imprudent and unsustainable long-range fiscal path” that will only worsen as 77 million baby boomers retire. “If the federal government was a private corporation and the same report came out this morning,” Walker said, “our stock would be dropping and there would be talk about whether the company’s management and directors needed a major shake-up.”

Our national stock is dropping. The value of the U.S. dollar has depreciated against almost every other major foreign currency. Anybody who believes that the federal government can continue to spend billions of dollars it doesn’t have is living in a fool’s paradise. Congress is already using the Social Security surplus to pay government operating expenses and “repaying” it with a bunch of IOUs. Of the aforementioned benefit deficit of $53 trillion, $34 trillion is owed for Medicare alone. Seven short years ago, the country’s entire entitlement shortfall stood at $20 trillion.

Walker recommends that all future presidents include a 10-year projection for every item in their annual budget, detailing the full fiscal effect of all current and proposed programs. Using a set of key national indicators as a guide, Congress and the White House must also scrutinize all federal spending, eliminating agencies and programs not producing expected results. Finally, a bipartisan panel similar to the Base Realignment and Closure Commission should be convened to deal with the entitlement crisis. And voters should only support candidates who unequivocally agree to stop squandering our children’s future.

[Libloather]

And voters should only support candidates who unequivocally agree to stop squandering our children’s future.

Ain't gonna happen. If it feels good, they'll do it.

[samtheman]

On this subject, Bush is part of the problem, not part of the solution.

[Flavius]

totally ludicrous article

everyone knows we can all eat china supplied arificially flavored cake

[rb22982]

Ain't gonna happen. If it feels good, they'll do it.

Yep. SS & Medicare are two of the biggest abominations ever created by our country. It should have been a private system right from the start (but then again, that wouldn't have kept the people dependent on the state)

[BipolarBob]

Fortunately there is an alternative. Move to another country. Yes moving to the country within South Dakota to Montana, you too can avoid these nasty vexing tax problems. Here’s where I’m going
http://www.foxnews.com/story/0,2933,317548,00.html

[Oldexpat]

I haven’t watched the MSM Evening News in years..but last night I happened to see Katie for a few minutes.
They did a piece on the famous”earmarks”..with Pres. Bush and ended the piece showing an Air Force warehouse full of unneeded purchases and said the Air Force was the worst spender. It seemed to blame earmarks on the Air Force and not Congress.
The people aren’t up in arms because our MSM “watchdog” media won’t do their job and make news out of this out-right curruption of “earmarks”..nor will they tell the public the truth about our Federal, State and local govt spending and insolvency.
Just look at CA..the press was blaming the Republicans for blocking the CA budget in Aug. They were more than right..CA is broke..busted.

[Wolfie]

And voters should only support candidates who unequivocally agree to stop squandering our children’s future.

Sorry, I'm not voting for Ron Paul.

[ROTB]

We will only vote for “front runners” who can “win”. We fear the judgment of men, should we vote for someone who won’t win.

See my tagline ...

[verity]

I agree with you.

This is a matter of political will. However, the electorate will punish anyone who attempts to correct the situation.

[purpleraine]

Individual and state problem. Cal spends $10 bill a year on services for illegals and has a $14 bill deficit.

[aroundabout]

"Our national stock is dropping. The value of the U.S. dollar has depreciated against almost every other major foreign currency. Anybody who believes that the federal government can continue to spend billions of dollars it doesn’t have is living in a fool’s paradise. Congress is already using the Social Security surplus to pay government operating expenses and “repaying” it with a bunch of IOUs. Of the aforementioned benefit deficit of $53 trillion, $34 trillion is owed for Medicare alone. Seven short years ago, the country’s entire entitlement shortfall stood at $20 trillion."

Just another alarmist piece aimed at the uninformed hand wringers. The dollar has been far lower then it is today. Back in the 1970's under the guidance of Jimmah Cahtah the dollar was in such bad shape that the French would not even accept them in payment for services used by American tourists, who were stranded there for a period of time while things were worked out. Back then about 25-30% of the entire worlds reserves were in dollars versus about 65% now. The dollar is and shall be the currency of last resort for as far into the future as one cares to look. If and when the sh*t truly hits the fan on this tired old planet, you will see a surge in the dollars value unprecedented in history as traders dump other more vulnerable currencies for the safety of the USA backed currency.

[TCats]

“And voters should only support candidates who unequivocally agree to stop squandering our children’s future.”

And just who might those candidates be?? Let’s face it, as far as spending goes there is little if any difference between the parties or the candidates. From where I sit we are on our own.Our leaders (Of all persuasions) are interested in their own interests - Or, after being elected, very soon adopt that philosophy.

[hermgem]

Just three years ago G.W.Bush tried to address this Social Security problem by:
a) guaranteeing seniors their social security and
b) allow privatizing future recipients social security payroll deductions.
Loud howling from the Dem's and most of all from AARP the Dem’s best friend and true interest group.
We are looking towards degrade Social Security into a welfare program, where the income poor, and that is those who pay the least, are the only ones that receive Social Security.
Dem's will profit as there will be more poor ones which infallibly are true Dem voters.

[TLI]

I wonder if debit ridden Citizens here will realize the Republic of Texas "kooks" were not so crazy after all. Especially when the Governor’s name is Martinez, not Perry, they can not get a job and things are starting to look like a blend of mexico and Rhodesia.

Nah, probably not.

[AmericaUnited]

$34 trillion is owed for Medicare alone

Just wait till we get a full-blown socialized medical system. That will be chump-change.

[backtothestreets]

"Ain't gonna happen. If it feels good, they'll do it."

It may have felt good at one time, but my gut instincts tell me that's not the case anymore. I believe everyone in government knows the dire financial straights our nation is in, and they have decided it is a helpless situation they are fearful to tackle. I believe most Americans have a sense of how bad the situation is too.

The government created the mess. Congress cannot stop spending, therefore it cannot stop borrowing. If it did, the whole nation would soon learn what the federal government knows, but is fearful to admit. Without the government spending there is no segment of American society that can sustain the economy under current circumstances. Millions of people would find themselves out of work.

Americans cannot provide an economic replacement to the lost government spending if it ended. Too many Americans are already in a financial quagmire of debt.

American industries cannot provide an economic replacement if government spending suddenly ended as a large number of factories have been moved to other countries.

The nation has been stripped bare of any public segment that could support a sound economy. As a nation, we are up the creek, not only without a paddle, but without so much as a log to cling to.

We are living in a time of a false economy. If not for the government borrowing vast sums of money to be spent on every conceivable project, the truth of our financial straights would be painfully obvious to all immediately. Even the entitlements are no longer geared to assist retirees, but to get money into the hands of people that will spend it immediately to help mask the precarious situation.

[outofstyle]

each American household owes $455,000 for these entitlements

And that is before we get the bill for the gifts under Hillary's "holiday tree."

[rb22982]

While that is true, the government could however flatline or slightly decrease spending—especially on ‘social programs.’ With time and inflatin, the real spending by the gov’t will go down significantly, and the private sector spending will go up picking up that slack.

[Kevmo]

bmflr

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According to Intrade, the winner of the December 12th GOP debate was... Duncan Hunter.
http://www.freerepublic.com/focus/f-news/1938773/posts

[backtothestreets]

I agree. I just don’t see it happening in government voluntarily. I don’t see either political party as having the moral fortitude to make it happen either. Nonetheless, you are correct.