Skip to comments.How Much Do We Owe?
Posted on 09/29/2012 6:08:20 AM PDT by Kaslin
Have you ever wondered how much we as taxpayers actually owe because of commitments politicians have made on our behalf? Turns out, the answer is not as simple as you might think.
The place to start is with a report put out annually by the U.S. Treasury. There I learned that the federal government officially recognizes an outstanding debt of $17.5 trillion. This amount consists of $10.2 trillion in government debt held by the public, plus pension and retirement benefits owed to federal employees.
On the one hand, that amount exceeds our countrys entire gross domestic product and thats pretty bad. On the other hand I was surprised that the number wasnt even higher because Hey wait a minute.
What about Social Security? Its not on the list. What about Medicare? Its not there either.
On further investigation, I found out why. Social Security promises are part of current law and can be changed by Congress at any time, I was told. Ditto for Medicare. And disability insurance. And survivors insurance. Etc. Etc. Thats a bureaucratic way of saying, We can break those promises any time we want to.
So lets see if Ive got this right. Ive been paying Social Security taxes for some 45 years or so and the federal government doesnt officially admit that it owes me a dime. The same is true for 45 years of Medicare taxes. But it does admit that it owes pension benefits and post-retirement medical benefits to federal workers. As a taxpayer, Im liable for all the promises the government has made to its own employees. But federal workers are not liable (necessarily) for all the promises the government has made to me.
If you are a bond holder or a federal employee the federal government is saying, We owe you the money. But if youre a senior on Medicare or Social Security, the governments position is, We can default on our promises to you anytime things get a bit tight.
Whats wrong with this picture?
Still, the government isnt likely to abolish Social Security and Medicare anytime soon. In fact, its unlikely to ever abolish them. So what happens to the amount we owe if we throw those promises into the picture along with everything else? The calculations have been made in a study for the National Center for Policy Analysis by former Social Security/Medicare Trustee Thomas R. Saving and economist Andrew J. Rettenmaier. Heres what they found:
If todays seniors get everything thats been promised to them, they can expect to receive $12.8 trillion in Social Security and Medicare benefits beyond the estimated taxes and premiums that will be collected to fund those programs.Bottom line: we taxpayers owe a great deal. In fact, we owe about five-and-a-half times what the government officially admits.
If these promises to the elderly are counted as official obligations, federal liabilities would climb to $30.3 trillion about twice the size of our entire economy.
If we also include promises being made to all the young people who are currently paying (FICA) payroll taxes, the total climbs to nearly $84 trillion.
Right - and if we earned interest on the money paid into Social Security - we'd be owed a LOT MORE than we're being paid. The article is a lie - well dressed - but still a lie.
Any other plan is just pollyanna nonsense.
Incremental devaluation is the planned and present solution. The incremental compound devaluation and resultant incremental compounded inflation will be tolerated.
The debt will be devalued away
We will inflate the currency such that a $100T debt is no big deal? Over what time period?
As long as necessary...... 7 or 8 years at least
Obama voters seem to not care how much we owe.
"The world owes you a living...no matter how lazy, dumb, slovenly, drunk, drug-addicted...no matter how many convictions for distribution/possesion, armed robbery, domestic violence, murder and mayhem, no matter how many screwups, jobs lost, kids abandoned."
"The world owes you a living and Obama's gonna make sure US taxpayers pay for it."
It could happen in the blink of an eye with a second term President's EO;
"Stroke of the pen, Law of the land, Kind of neat, Huh."
Two other things, Ponzi scheme and death panels.
I can’t wait till I can work 1 hour and pay my 5-10 year old Mortgage off with worthless dollars.
The 15000 dollar loaf of bread I can wait for.
——I cant wait till I can work 1 hour and pay my 5-10 year old Mortgage——
It will not be like that. I visualize a future in 7- 10 years where your present mortgage payment of say $1,000 will worth be only $500 in today’s money to the banker. Not only that, but the resale value of your house will increase, even double.
The banker loses on the devaluation of the $$$ and you benefit by the inflation of the resale amount of your house.
The minimum wage of $7 today will be $14 or so then
Housing prices are currently rising at around 4%. An increase to near 7% is what I think will happen. the goal will be to maintain an increase rate of =<7%. A rate above that will not be tolerated
Although there is no absolutely stable standard of measure, the $ values of real estate and gold are good indicators.
I recall in the late seventies my parents bank used to call every month or so and ask if they wanted to pay off the $1500 left on their mortgage. They were paying something like $80 a month at a sub 5% rate. The new mortgages were going out at 3x that. The bank was getting killed.
My Dad would laugh at them. Then he would mutter something about making sure his last payment would be a day late.
He didn’t begrudge them their money, but he also pointed out that the bank bothered him just as much in ‘57 when he was a day late—and that they were not so pleasant.
Last I heard it was up to 160,000 per person. For a family of four that would be roughly 560,000 for all of BJ Obama's regime. (That is $40,000 per year per person.)
I like to illustrate it as him taking out a credit card IN MY NAME and charging me a 40% interest rate, and I don't even get the satisfaction of driving a new car for my debt effort.
In some sectors they call it identity theft.
use a couple slices of bread to pay the mortgage would be cool, *if* i can afford the bread ???
Didn't we try that under the last guy?
Dont forget the gubment taxes you for protecting your money from inflation.