Skip to comments.Simple Math Shows America Is Headed for an Economic Disaster
Posted on 04/18/2016 7:21:40 PM PDT by george76
Stan Druckenmiller ... when I look at the current picture of expected tax revenues combined with benefits promised to future generations, this is the most unsustainable situation I have seen ever in my career.
The disaster that Druckenmiller sees coming for the United States is all about changing demographics and entitlement spending. They dont add up to a sustainable situation.
In 1940, entitlement payments, which include everything from disability payments to Social Security to Medicare, amounted to just over 20% of annual government spending in the United States.
Today, entitlement spending has swelled to nearly 70% of the annual federal budget.
Things are about to get a whole lot more complicated. The 20-year baby boom that took place after World War II is now beginning to result in a retiree boom.
Corporations are required to disclose on their balance sheet the future defined pension obligations that their employees have earned.
Those are very real liabilities for companies that are going to have to be paid, so they should be included.
The balance sheet of the United States, meanwhile, doesnt account for the future payments that it has promised ... They should be recorded as liabilities of the United States.
(Excerpt) Read more at dailyreckoning.com ...
We need to be taxing at about 19 or 20 percent of GDP and spending at about 17 percent. Instead, we are spending at 24 percent GDP and taxing at about 19 percent.
I am not going to get more generous.
Government was never intended to be wealth redistributor charity.
“Either tax rates rise or generosity falls”
I vote for falling generosity.
Fed.gov needs to have a debt crisis and failure - the sooner the better while Americans still have some notion of states’ rights and local governance to step into the vacuum, and while some people still remember what the Constitution is.
The free sh*t army votes.
We all know the answer.
Aborting 2 million future wage earners/taxpayers per year since 1973 has not helped.
The beginning of the “aborted generations” would now be in their prime earning years.
I think, eventually, you’re going to have to take the vote away from anyone who doesn’t pay taxes. It will require a Revolution, however.
“Generosity falls” — After paying libenty-zillion bucks into this stinking ponzi scheme and being able to get a tiny fraction out, I’m the beneficiary of “generosity”
FU whoever put that lousy caption on that graph. If I’d been able to opt out and put away my own money for my benefit, I could have retired years ago.
Socialism sucks big time.
The Socialist solution is to raise taxes and kill the old, infirm and poor.
Ultimately the solution to a socialist scheme like Medicare/Medicare is rationing with such long wait times that people opt for private solutions which is what works in places like Singapore. In Singapore the poor get poor healthcare from their medicaid system and the middle class and up buy cheap full on capitalist healthcare. Capitalism is the solution to bad systems like this but we need to get a reformer in there for a chance to fix the broken systems.
This is the way it always ends. Politicians figure out they can buy votes by giving away the treasury. This works “well” for awhile. Then it fails spectacularly.
Assuming..., that is..., that they were productive working citizens and not additional members of the "Givzee me Dat" class...
“either tax rates rise or GENEROSITY falls..”
GENEROSITY..! You get that?
When Uncle Sam robs you and pays another guy, Uncle Sam is GENEROUS.
Just takes your breath away.
What can’t go on forever, won’t. The question is how many more generations are we bankrupting with entitlement spending, gargantuan government, and pension promises that cannot be honored.
The government under Obama for three years of his Presidency denied SS recipients and federal and postal retirees a COLA cost of living increase. Hasn’t happened in forty years but Obama cuts it three times. Now they have money to bring in illegal aliens and Syrian refugees. While retirees and the middle class see their savings dwindle and no return but pennies on savings and CDs.
You beat me to it.
I think that was a quote by Herb Stein, the father of Ben Stein.
The horror of abortion can’t hold a candle in pure numbers to the number of Americans “lost” via artificial contraception; besides the financial disaster, the related demographic disaster (which can’t be addressed with printing presses) continues to rapidly unfold. The election of Obama in 2008, and especially the re-election four years later (after four years of utter failure) really demonstrate how quickly this country is changing to a Third World socialist toilet with no semblance of the country founded 200+ years ago. Language, religion, politics - all drastically turned upside down is a couple of decades (and worsening BY THE DAY).
Yup, the finally figured out they could vote their way to the nation's treasure. Won't be long now before it is all gone.