April 25, 2008

Do you understand that the United States is $53 TRILLION in debt - and not the $9 trillion you are led to believe?


Just wondering. 'Cause I bet 99% of Americans believe what their political leaders tell them too, versus the truth.

Meanwhile, one lonely unnoticed office in the government (thank you David Walker, US Comptroller General)
IS reporting the $53 TRILLION number. It's just that not a lot of folks choose to believe it. Or pay attention to it.

If our Presidents or Congressmen were CEO's, they'd be jailed for Sarbanes-Oxley violations. If the budget director was a CFO, he'd be indicted for fraud.

So why do our political leaders and presidential candidates (and our mostly compliant and incompetent MSM) get away with reporting the $9.3 trillion number, when one department in our own government is now reporting $53 TRILLION?

It's because our leaders in DC, unlike our corportations, made it so they don't legally need to report the value of future promised liabilities (social security, medicaid, medicare, military health benefits, etc) on our nation's balance sheet. It's as if they didn't exist. Which is understandable I guess, because indeed, they might not exist. Oh, sorry (non-boomers), you weren't really counting on social security or medicaid being there in your retirement, where you?

Can you imagine if Ford didn't have to report the value of their pension liabilities? Can you imagine if Boeing didn't have to account for the projected healthcare costs of their retirees? Can you imagine if GE put out an announcement today that they weren't going renege on their retirement liabilities?

Well, that's what the Congress, the President and all three major candidates are doing. And almost every single person in the country believes The Big Lie. Baaaaaaa.

David Walker was recently pushed out for speaking out, and I doubt the next Comptroller General will be so honest and vocal. But the truth is now out there.


This issue HP'ers, along with global warming, islamofascism and commodity wars, will dominate the rest of your time here on earth.

Here's some MSM reporting of the issue, that just doesn't seem to want to gain any traction yet. But get ready. The boomers are retiring. And the bill is coming due.

Federal government addicted to debt,' U.S. comptroller says, and the consequences could be dire

Walker: Economic mess awaits unless action is taken

The $53 trillion asteroid

33 comments:

credit frenzy said...

I don't see what the big deal is. Everyone has a balance on their credit cards these days, so why should the US government be any different?

Plus, I can't believe the US is alone in reserving a cot in debtors prison.

Anonymous said...

Logans Run Time.

Give them Social Security at 67.

"Retire" them at 70.

Andrew from Russia said...

Perhaps it can be broken down into $9T that must be paid (international liabilities, etc.) and $44T that can be safely defaulted on (Medi-something and other social stuff) as long as water cannons and rubber bullets are in an adequate supply.

Yoski said...

In the end there are only 2 ways out of this dilemma.
The first solution is the $$ printing press, ie. inflation.
The second solution is outright default, ie. deflation.
Knowing how our politician operate I bet they'll opt for inflation. You can always blame the rising prices on somebody/something else. The Chinese, oil producers, immigrants, speculators, liberals, evil foreigners in general, global warming, environmentalism, Easter Bunny, etc. Given how clueless most people are they'll believe whatever government tells them.
See, on the other hand defaulting on promises is going to be hard to justify. Makes for angry voters and jobless politicians.

happy homeowner in the stix said...

I still think that $53 trillion is understating it all on the Federal level, and heaven only knows what kind of deficits the states have run up.

Look for inflation to really kick into gear, kids.

I swear, it's the 70's all over again.

Mark said...

Thanks youy FDR and LBJ for these time bombs of financial destruction...

Anonymous said...

IMO nobody born after 1955 is goin to be seeing ANY social security benefits. You genX and GenY people can stop your whining. I am a "boomer" but born on the tail end 62. I don't expect a penny of soc. sec., probably not even medicare, unless we get a universal health care plan similar to Canada. My question is.....what is everybody going to do when WELFARE is gone? The poor will suffer, but the people that will really be up the creek are all the people that make their living off of the poor. The social workers, transportation providers, doctors, hospitals, grocery stores (food stamps), and such. Boomers are retiring, the tax money is drying up and there isn't enough money to support everyone (53 trillion in debt), guess who is gonna be pissed if the PTB don't have enough...the boomers who have WORKED and paid into the system almost all their lives. These boomers (born 1940-50) are going to say F#$% the lazy welfare moms. I am GETTIN MY MONEY BACK!
Also, IMO if you want to END WELFARE or DRASTICALLY REDUCE COSTS make welfare benefits available ONLY to people who are:
1. married but are living at or below the poverty level, and have at least two natural children (step kids, half kids, adopted kids, etc don't count)ie: a man can't marry a woman with two kids and then the family is eligible for welfare.
2. Offer no public housing.
3. limited food stamps
4. Medical Coverage ONLY for children.
The PTB will never do this. Too many people make money off of welfare recipients-BIG money. That's why there is no welfare reform. Alot of rich people got/get rich off of the poor. The poor are a commodity, hell they should probably be listed on the stock exchange.
Grace

Fed El Reserve said...

For the last time:

DEBT IS WEALTH

area 51 said...

Liabilities are offset by immediate write down of govt. assets, vs. amortization over the lifetime of the asset as corporations do.

You need to understand what the f*ck you are talking about instead of spouting off like an ignorant amateur.

Whan the govt. buys a building or tank, it is immediately written down as an expenditure, vs. being added as an asset. If it was (added as asset and depreciated over its life), it would offset the "liability" part and yield perhaps *even better* results than the $9T.

Besides what counts is percentage of debt/GDP which is DECREASING.

Aren't you always saying "It's the P/E stupid"?

Well that's right STUPID, it is the same concept, debt/GDP.

F-ing amateurs.....

Mark in San Diego said...

Nice little space filler in the Financial Times today - ING did a report about obesity - basically, if people are getting fatter in the USA - by 2050, 50% will be really fat - then they die 5 years sooner - so it saves on Social Security amd Medicare, etc. So it said, "maybe governments shouldn't push diets so much." I don't think this was online, as it was just a small item.

brianbb said...

That's not totally true.

They are projecting out SS differences between receipts and payments for all time. They could cut the payments by 10% and how much would the "deficit" go down? Probably a good bit. Why wouldn't you cut benefits now that people live so long?

How about getting all the social security disability scammers off the dole? How much would that help?

When you have debt, you have to pay it. When you have a SS program, you can cut the benefits. So it's not the same.

Similarly, medicare/medicaid is heading toward ruination. Tough choices, ie put seniors in HMOs, ration care beyond a certain age, etc. etc., and the problem goes away.

The gov't hasn't reserved anything for all the gov't retirement benefits it will ahve to pay. Now that is a true unfunded liability.

Corporations have to put something aside and reduce their profits for pensions etc. The gov't uses "pay as you go", ie put nothing aside now, just pay the benefits as they come due.

Anonymous said...

area 51...stop making sense, you'll cause a lot of these financial rubes' heads to explode

Printer's pet said...

Start the printing presses.

Lets distribute $1M to all taxpayers who filed a return.

I like George Bush and his "SIN"cerity to Americans

Anonymous said...

So what? We can always print out $54 trillion to repay and may be an extra $5 trillion for an additional tax rebates to go with that. How do you like that?

Anonymous said...

Keith. I think you have been gulping down too much of the right wing propaganda. Step away from the Republicon Kool-Aid.

Anonymous said...

Keith, you seem to have drunk more Kool Aid on this issue than Obama supporters have for their candidate.

Here's a quote from 'The Trillion Dollar Meltdown', by Charles Morris (an excellent dissection of where we are and how we got here):

"The Social Security system is clearly running actuarial long-term deficits, but they hardly amount to a crisis. A variety of plans were floated [in the early 2000s]--each with different combinations of adjusting retirement ages, covered wages, and the like--that would have achieved solvency without radical change. At least one of them, from economists at Brookings, was certified as actuarially sound by both the Social Security actuary and the Congressional Budget Office. if the administration had adopted it, it almost certainly would have passed with bipartisan support."

Bush, of course, found it more important to shovel more profits to Big Finance through and incredibly flawed 'privitization' plan than to actually fix a system that has worked insanely well.

I realize the strident, Libertarian persona is something you either come by naturally or push forward to make your blog more unique, but harping on SS just makes you look stupid to anyone not beholden to a particular ideology.

As for young people among your readership, I have a bit of advice: life doesn't usually turn out the way you think. Today, you're very sure you'll have all the money you need when you get older and the SS is just a drag on you. The reality is, 90% or more of you will be very glad in a few decades that it's still there. And it will be. And it won't be crippling the nation.

--dark1p

Anonymous said...

Ron Paul was talking about this all through his campaign but I guess nobody noticed. Who cares right - the kids will pay for it!!

Anonymous said...

I'm 35, have been paying into SS system for about 12 years now, and I don't expect to be able to draw any benefits when I retire in 30-40 years. I fully support the privatization of SS, so that I get to keep MY MONEY and invest/save/spend however I want.

redondo_beach_dude said...

The 60 minutes segment with David Walker, a must see...

http://youtube.com/watch?v=OS2fI2p9iVs

marica izda debol said...

probably not even medicare, unless we get a universal health care plan similar to Canada. My question is.....what is everybody going to do when WELFARE is gone? The poor will suffer, but the people that will really be up the creek are all the people that make their living off of the poor.

$53 TRILLION in the hole and people are still talking about free healthcare.

As for the poor, stop breeding like cockroaches and get a job.

This welfare society is reverse Darwinism. The poor, lazy, stupid, and criminal are having loads of children while the intelligent, smart, and able are unable to have children because they have to work 70 hours a week to subsidize the mongrels.

duh duh duh said...

Whan the govt. buys a building or tank, it is immediately written down as an expenditure, vs. being added as an asset.

You don't have a f*cking clue what you are talking about. Those liabilities are unfunded pension liabilities. There are no assets on the books to balance them out. The "company" has to raise cash to fund that liability, but where/whom from?

Take Intermediate Accounting II before you try to teach people about accounting.

Anonymous said...

Keith, when you use words like islamofascism, you sound just like the Foxtoids you so deride.

Anonymous said...

the $9 Trillion treasury debt needs to get paid back or else we will no longer be able to borrow any more. the amount borrowed from social security doesn't need to get paid back by any stretch. they can just decide to cancel social security benifits once there is no money left in the program

HappyRenter said...

Jeremy Siegel (stocks for the long run) took a brief look at the SS issue in his most recent book. He thinks the best solution would be to raise the age at whih you can begin claiming benefits to ~70 (from 62). This would be best handled if the increases in benefit age were gradually phased in over the next 10 years.

Anonymous said...

Socialist Stupidity was doomed to fail from the beginning. In 1935, there were 6 workers for each retiree. Today, there are 3 workers per retiree. By 2050, there will be 2 workers for each retiree. Where is the funding going to come from? Do you think the illegal Mestizo peasant janitors will be able to save it? Do you think they will be willing to be taxed to death to fund the retirement of a bunch of old white people?

Ian said...

And i bet you were the same people laughing at Al Gore and his "lock box" not so funny now with Bush is it?

Jack Sprat said...

$9 or $53 Trillion are both stupid numbers - and it isn't debt.
The so called debt is 'lubrication' for the engine. What is spit out in Social Security Payments, medicaire, etc., is spit right back out again. It works quite differently between a Government and a Corporation.
When a nation spends it's wealth on goods/services/resources from other nations who do not equally reciprocate,,that nation will eventually be bled out. That's the USA's real debt.

redondo_beach_dude said...

marica izda debol said...

This welfare society is reverse Darwinism. The poor, lazy, stupid, and criminal are having loads of children while the intelligent, smart, and able are unable to have children because they have to work 70 hours a week to subsidize the mongrels.

Quite profound... Often, the simplest observations illustrate the real crux of the issues, Occam's razor, if you will.

Anonymous said...

Mark in San Diego said...

Nice little space filler in the Financial Times today - ING did a report about obesity - basically, if people are getting fatter in the USA - by 2050, 50% will be really fat - then they die 5 years sooner - so it saves on Social Security amd Medicare, etc. So it said, "maybe governments shouldn't push diets so much." I don't think this was online, as it was just a small item.

Maybe the gubmint should send Dunkin Donuts and Carmel Mocha Lattes instead of rebates.

Anonymous said...

This welfare society is reverse Darwinism. The poor, lazy, stupid, and criminal are having loads of children while the intelligent, smart, and able are unable to have children because they have to work 70 hours a week to subsidize the mongrels.
====================================
Maybe you can convince the Bushtoids that abortion can be a good thing?

Anonymous said...

Hey!!!! that's my social security number - be careful jose might use it.

abb said...

Wake up Keith. Global warming and Islamofascism are scams too.

How else do you get a global population on the same page other than "global warming"? A global tax to save the planet. That's the true goal. The "carbon" tax. (A tax on life itself.) Enabling a global authoritative power that supercedes national sovereignty. Get it yet?

Islamofascism. Feed one side propaganda to fear Islam. Feed the other side propaganda to hate the west. Add in some illegal wars, palestine holocaust, and overthrowing dictators who aren't playing ball, and the profits roll in. You can't control populations unless you herd them.

Anonymous said...

Does anyone believe anything coming out of Washington? I don't. How do we know that Walker is right in what he says? If corporate America and the government constantly lie or exaggerate to you, why listen to them? Why ask anything of them? I personally don't care if the USA is in $9 trillion of debt or $53 trillion or $86 quadrillion of debt, no one cares anymore. No one takes that government seriously anymore. I don't.