We hear about the National Debt and how it has escalated under Barack Obama and it has, but we seldom ever talk about the UNSECURED LIABILITIES of the Federal Government. That figure, depending on what source you quote is between $125 and $200 TRILLION. That is beyond broke and beyond repair. The Country Music Group, “The Tractors” have a song entitled, “Badly Bent” in which one verse says, “I’d like to ask the Congress; I’d like to ask the president ‘Can you tell me where the money went…” No, they can’t and we are beyond broke and are more than badly bent financially. In fact, some economists have suggested that the Federal Government needs at least $200 TRILLION to invest in private sector jobs in order to fund its legal liabilities. America’s unsecured liabilities is a taboo topic for politicians and most government reporting agencies and glossed over as though it were simply numbers on a page and having no real consequence. WRONG!
In my research on this matter, it seems that the Congressional Budget Office operates with TWO SETS OF BOOKS as any Ponzi scheme would require. There is the Extended Baseline Forecaster (EBF) which is used to report to financial outlets and the second is the Alternative Fiscal Scenario (AFS). The difference is the AFS is used to project future taxes and spending that includes not just the laws on the books but the activities of Congress and the President’s bending and changing laws without actually passing laws. This is what the CBO actually thinks America faces financially without a dramatic change in direction and policy. The EBF and AFS projections are dramatically different and the AFS is hidden usually hidden in one tab of a spreadsheet called Supplementary Data, which is almost impossible for anyone to find. Alas, now that page is gone, since some have called attention to it. I wonder why?
Our gross debt to GDP ratio is at least 105.5%. The revenue to GDP ratio is 35.8% and spending to GDP ratio is about 37%. That is not a viable situation and not only must we reduce the debt but the deficit and in order to do that we must drastically cut spending and even eliminate some federal entitlement programs and address waste and fraud with dogged determination. That will take more courage than the average politician has and more than most Americans seem to have. Why? Because it will turn off the flow of “freebies” and force some whose profession is “taking from the government” to have to fend for themselves in the real world. What a novel idea? Wait, it was presented in the Bible when Paul said, “Any man that WILL NOT WORK, should not eat.”
We have approximately 151 MILLION in the workforce today which is about 3.5 MILLION fewer than in 2000. However we have over 93 MILLION, not in the labor force and that has grown almost 15 MILLION since 2000. The U.S. population is roughly 323 MILLION and at least 161.5 MILLION are receiving benefits from the federal government. I do believe that is virtually 50%. When half of the population is receiving benefits from the government we have a situation beyond a crisis and a situation where there are not enough people working to tax even at 100% to support those receiving benefits. When we consider the 93 MILLION who are not participating in the labor force and dig a little deeper we find that about 49.6 MILLION are retired and another 10.7 MILLION are disabled. Thus, we have at least 15% who could be working but are not. But, the disabled number should not be assumed to mean that all 10.7 MILLION are 100% disabled and the question is how many of them could be working or working some? That would likely send the true unemployment number to a minimum of 20% and probably higher.
When will the United States Government go bankrupt? As long as the lenders maintain their willingness to receive interest on the loans, who knows? However, any rational person should realize that it is not possible to continue on this insane spending path into the future and not see a total collapse. One Economist said the immediate solution would be to raise all federal taxes by at least 57%, cut all federal spending by a minimum of 37% or some combination of both. What are the odds of any president and any congress passing and signing such a bill? You would have a better chance of winning the Lotto multiple times in a row with one ticket per year. I would suggest that a snowball would have a better chance of not melting in hell. IT WILL NOT HAPPEN! Were the Federal Government go bankrupt many, if not most of us, would face financial ruin immediately and the chaos, rioting and looting that would ensue would be catastrophic. So when you are deciding on who you want to be President, one of the things you should be considering is who wants to truly CUT GOVERNMENT THE MOST? You cannot leave all the entitlement programs intact. You cannot increase spending anywhere without dramatic cuts in other places to offset the increases. TAXATION is not the answer. America we have a DEBT CRISIS that is epic and if we do not begin to view the UNFUNDED LIABILITIES as well as the Deficit and Reported Debt we make a mistake.
The Democrats want to spend more, some of the Republicans want to leave all the entitlements in place and even expand some of them. What do you want? God bless you and God bless America!