The budget problem that the country faces isn’t merely big. Posted on 04/07/2011 5:17:38 AM PDT by Kaslin
The budget problem that the country faces isn’t merely big.
It isn’t even really, really big.
It’s much bigger, and more dangerous, in actual fact, than politicians are willing to acknowledge.
Think of the biggest number you can.
Yeah. It’s bigger than that.
The Congressional Budget Office says that if we continue at our current rate spending, we’ll “chalk up nearly $7 trillion in red ink over the next 10 years,” according to Reuters.
Yawn. Think bigger than that.
Because that number’s not even close to the size of the real problem we have. $7 trillion is just a fraction of the liabilities of the government as it doesn’t take into account all the “off-the-book” items.
You might remember “off-the-book” accounting. It made a stunning debut in the Enron scandal.
Oh.
You thought politicians fixed that problem? They did. The “fix” doesn’t apply to government accounting; it just applies to the rest of us.
While experts usually peg the unfunded portion of pension liabilities at around $1 trillion, that number is based on reports from public pension managers who are anxious to downplay the size of the gap in pension liabilities.
If real-world accounting methods are used to gauge the pension gap- you know, the methods that private pension managers have to use to stay out of prison- the states owe about $3 trillion to pension funds that they don’t have.
But, hey, what $2 trillion more or less.
Because, still, our problem is much bigger than that.
The IMF yesterday called upon the U.S. government to “make explicit its guarantees of the housing-finance market and bring them fully onto the government balance sheet.”
The IMF has this silly notion that the government should stand by loans it’s guaranteed and add the bill to the balance sheet.
Forbes’ Bill Bonner reckons the “total bailout bill…may exceed $20 trillion.”
The IMF stated the obvious by saying that government-guaranteed, easy credit helped drive prices up and create a real estate bubble in the first place.
So far that’s $7, plus $3, plus $20 trillion.
But wait. It gets worse.
Bill Gross, the manager of the world’s largest mutual fund, did calculations that includes all the liabilities of the government he could think of- Social Security, Medicaid, Medicare- and figured a deficit of around $75 trillion more or less.
Gross “has been selling Treasuries because they have little value within the context of a $75 trillion total debt burden,” he said, as reported in Bloomberg.
“This country appears to have an off- balance-sheet, unrecorded debt burden of close to 500 percent of GDP. We are out-Greeking the Greeks,” Gross concluded, referring to the debt crisis which has Greece teetering on bankruptcy.
Fellow investor Warren Buffet agrees with Gross. He’s told investors to stay away from U.S. government securities.
"If you ask me if the U.S. Dollar is going to hold its purchasing power fully at the level of 2011, 5 years, 10 years or 20 years from now, I would tell you it will not," Buffet said to overseas investors in March.
It’s not clear if we’re supposed to add the $20 trillion in mortgage obligations that the IMF is counting on to Gross’ estimate of $75 trillion.
$75 trillion is a number that would stagger even the late Carl Sagan.
Written out it's $75,000,000,000,000.00 if you are keeping box-score at home.
So, what’s a measly $2 or $3 trillion more or less, in a figure like that?
Just the pension problem, that’s what.
Our real problem, unfortunately, is much bigger than that.
So where did that $180 billion go? "Professor" Ohaha knows nothing about high finance----but Rahm toiled on Wall Street before becoming a (gag) 4 term Congressman, and a Goldman Sachs flack while employed by Clinton.
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Novelist Dean Koontz estimates about $70 Billion has been looted from US govt assets.
At least half a dozen people in the Ohaha admin are going to walk away from “Public Service“ living like the Sultan of Brunei......and we can name them all without even breaking a sweat.
HOW GANGSTER GOVERNMENT SCAMMED BILLIONS USING THE MADOFF MO The trustee ID'ing Madoff's assets, found Madoff created a labyrinth of interrelated international funds, institutions and financial entities of unparalleled complexity and breadth......with assets and businesses in multiple places offshore that hid government fraud, thievery, money launderering, tax evasion........ all out of sight of taxpayers, the IRS, SEC, FEC and US banking laws.
BTW, stolen money is taxable.
Thats just looking at our debt as to our BUDGETed allounces, and us going over our budget. That is what we commonly refer to as our national debt.
The REAL DEBT is MUCH,MUCH worse.
There are many things that are paid for that are never put into the budget. These unfunded items are whats CLEARLY killing us.
Simpleton liberals refuse to understand that just at common held $14 TRILLION debt, that would mean that every man, woman and child in this country owes $45,000. Add up the Forbes top 400 richest Americans estimated wealth, (people with an estimated worth of $1 billion or more) and that comes to $1.6 TRILLION. Barely enough to match "this years" BUDGET deficit.
BUT...when we look at our UNFUNDED DEBT, we see that $14 TRILLION in our budget debt is peanuts. I've seen or heard estimates that put our UNFUNDED DEBT at $100-$120 TRILLION.
That means about $390,000 for every man, woman or child. A typical family of 4 would owe over $1.5 million.
This country is bankrupt.
We just haven't been foreclosed on.
We have a population of approximately 310 million people. If we had just 10 million families with 2 parents and 2 kids, owing over $1.5 million each, that would be $15 TRILLION. The entire wealth of all the country's Billionaires would only pay for 1/10th of that. The average family has the majority of its wealth tied up in their homes. The average home is worth about $200,000.
Only about enough to pay HALF THE DEBT obligation for one person, let alone any other family members.
Not to mention, most people owe a mortgage on their homes, so they don't even own that free and clear.
They have come out numerous times in the last 2 years and reappraised their numbers to what "naysayers" have said all along.
Last year we had a deficit of over $1.3 TRILLION. This years projected deficit is $1.6 TRILLION.
Thats almost $3 TRILLION in just 2 YEARS, and they want us to believe we will just have an extra $7 TRILLION in debt in 10 years.
And we haven't even talked about the extra costs Obamacare is going to add to the debt.
If we extrapolate this year and last years deficits out $10 years, that would mean $15 TRILLION not $7 TRILLION. And just like this years $.3 TRILLION jump, we can expect the same over each consecutive year.
And our "leaders" are haggling over a few 10's of billions.
IDIOTS!!!!
There isn't enough wealth worldwide to cover our debt.
If the US defaulted on its debt, the banks in Saudi Arabia and China would be holding worthless IOU's and just as worthless US money.
The ENTIRE WORLDS monetary system will come crashing down.
Every time I think about that I wonder if the Congresscritters really are that stupid? I think not. I think this running up of massive debt is intentional and serves a much larger goal.
Which is why people are buying up gold and silver, and maybe copper.
I think that's the plan.....
Typical
I believe Paul Ryan on this. I know that any Dem budget is just smoke and mirrors. Their only interest is to transform this country. I just thought it was amusing that they were saying the Ryan budget would raise the deficit. If that were actually the case they would have LOVED his budget. The fact that they didn’t leads me to believe it is good.
The panhandler on the street corner may end up being about as "wealthy" as Bill Gates.
But, we'll probably have started WWIII before then, and to the victors will go the spoils.
Which is why people are buying up gold and silver, and maybe copper.
I realize buying metals is a wise hedge against inflation of fiat money. But whats stopping the powers that be from pulling an FDR, confiscating Gold (and silver, platinum and maybe copper) ?
They are not even serious on balancing the budget
1. It's not 1933 anymore. When FDR confiscated the gold it was part of his plan to devalue the dollar (from $20 for an ounce to 35 an ounce) with fiat money, there is no need to confiscate to devalue.
2. The other metals have never been confiscated before, so they have that going for them.
3. Only about 1 to 2% of Americans are into hard assets so they might not be "in the sights" of the government this time.
4. If the monetary system collapses, how are they going to pay the thugs to do the confiscating.
5. Massive noncomplainace and a highly developed black market would likely emerge.
We bought some silver eagles last month. I held out as long as I could. I am also very worried....and Angry!
I’m trying to decide if I should cash out all my investments in the stock market. What do I do if I do that?
There’s just waaaaaaaaaaay too much uncertainty. Except for the tsunami of debt - that’s very certain.
“But, we’ll probably have started WWIII before then, and to the victors will go the spoils. “
Unless we win, then we will start rebuilding the world and do some more nation building.
(Ahem) Nickels are legal currency.
Why You Need to Own Nickels, Right Now
Also, (gold) Krugerrands are also the legal currency of South Africa.
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