Skip to comments.Spending our way to financial ruin (each American household owes $455,000 for entitlements)
Posted on 12/22/2007 7:22:36 AM PST by 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 Walkers 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. Walkers 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 whats contained in them.
The federal government is already on the hook for $53 trillion in Social Security, Medicare and other entitlement benefits that it cant pay for unless it raises taxes to levels that will put America into a financial Stone Age.
In releasing the federal governments 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 companys 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 doesnt have is living in a fools 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 countrys 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 childrens future.
Is this where we want to be? The same economic conditions that existed then?
You seem to believe this is where we are headed, I do not
Back then about 25-30% of the entire worlds reserves were in dollars versus about 65% now.
The reason there has been such a large increase, is the fact that we are carrying such a large trade deficit. The scary thing is the dollar has declined this much in a time of economic growth in our country.
We are by far the worlds largest consumer. If they choose they may ask us to pay them in Euros, or Kroner, or Marks, or Yen. So why don't they? The answer is quite obvious, they want our business and do not want to price themselves out of OUR market. Until such time as America ceases to be the engine that pulls the worlds economic train, the dollar will continue to be the currency of choice for the plurality if not the majority of countries.
Over the years the dollar, like other currencies rises and falls and currently it is at a level close to it's historical average if not a tad above. It has even been strengthening relative to the Euro over the past few weeks. The whole thing is nothing more them media scare tactics designed to make people think the end is near and it is, of course, Bushes fault.
Have a Merry Christmas and a nice glass of wine. Don't worry about the dollar, it'll be just fine and so will we. After all we represent about 25% of the entire worlds GDP and as such we will remain at the fore for a long, long time to come.
That's true as long we maintain a position as the primary superpower in the world. The dollar basically is accepted anywhere because the bearer can always cash it in. If that ever changes, we become the Weimar Republic.
I don’t “owe” nobody nuttin!
hehehe...that's a conservative's job, isn't it? ;-)
Nothing is forever but given our current military capabilities and our ongoing R&D programs to advance them, I cannot envision a future when we will not be the preeminent military power.
>>>This system of government is broken. It needs to be scrapped.<<<
The next step comes when Augustus, having been granted the absolute powers, restores the republic and rules with peaceful beneficence. Good times for a while. Eventually, when the term becomes meaningless, we all get to be citizens.
Hold on tight. The RATS aren't done spending your money yet...
Since we’re all about “sustainability” nowadays:
Socialism ...is unsustainable.
We wish you a Merry AMT,
And a statist New Year...
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