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Is America about to go broke? (Government obligations are much worse than you probably think)
MSN Money ^ | 5/11/2009 | Scott Burns

Posted on 05/11/2009 10:32:49 AM PDT by SeekAndFind

Government obligations for Social Security and Medicare may soon exceed the combined net worth of every household and nonprofit organization in the country.

Prices dropped last year. But we still need to invest to protect ourselves from inflation. That's why our retirement-plan investing needs an inflation "tilt." You'll understand why in a few paragraphs.

How bad will future inflation be? I don't know. Neither does anyone else. It could be a normal inflation of 3% to 4% a year. It could also be a banana-republic 10% a month.

What we know is that all governments make promises they can't fulfill. Our government certainly has. Under both political parties, it has taken promise making to a high art. This is not hyperbole. The figures can be found in regularly published government reports.

Much worse than you probably think

The figures exist, but they are ignored. News reports regularly inform us of the growing federal deficit, projected at a stunning $1.75 trillion for fiscal 2009 and $1.17 trillion for 2010. But regularly reported, less visible government obligations have been growing much faster.

In the nearly five years from January 2003 to December 2007, the Medicare trustees reported that the unfunded liabilities of Social Security and Medicare grew by a stunning $10.4 trillion. The average annual growth topped $2 trillion.

That exceeds the expected formal deficit of $1.75 trillion this year.

In the 2008 trustees' report (.pdf file), the unfunded liabilities of Social Security and Medicare -- promises of future retirement and health care benefits -- total $42.9 trillion. In a few days, we should be able to read the 2009 report. It's a good bet that the unfunded liabilities will show an increase in the new report.

(Excerpt) Read more at articles.moneycentral.msn.com ...


TOPICS: Business/Economy; Editorial; Government; News/Current Events
KEYWORDS: biggovernment; broke; govwatch; medicare; socialinsecurity; socialism; socialsecurity; thecomingdepression; usa; usssa
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To: jersey117
If no one stops zero from plunging the nation into trillions of dollars in debt

We are already seriously in the poop can, and Obama will plunge us down further.

21 posted on 05/11/2009 10:48:17 AM PDT by beaversmom
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To: SeekAndFind

Is this a joke? If a family had to borrow $0.46 of every dollar it spent to make it’s budget, as is the condition of Obama’s current federal budget, would there even be a question about whether or not that family is broke?

Combine the budget situation with the Fed buying our own Treasury bills, and there can be no doubt - the US is hopelessly insolvent. They can’t continue like this for long before the whole thing implodes.

How long could you go on spending $1000 a month if you only make $540 a month?


22 posted on 05/11/2009 10:48:22 AM PDT by Zeddicus
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To: Zeddicus
How long could you go on spending $1000 a month if you only make $540 a month?

One big difference --- the family cannot "create" money. Uncle Sam can. As long as the world "believes" in the paper that Uncle Sam creates, this illusion can last for some time. How long, nobody knows.
23 posted on 05/11/2009 10:50:39 AM PDT by SeekAndFind
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To: SeekAndFind
Ok .. I'm 61.

I don't want an early in at 62, but will anything ne there at 65? 67?

24 posted on 05/11/2009 10:51:30 AM PDT by knarf (I say things that are true ... I have no proof ... but they're true)
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To: Kartographer

“souls of all my great-great grandchildren’s souls”

It’s going to happen much sooner than that. Your great great grandchildren won’t even be born in America. Amerika is all that’ll be here for maybe a few years more.


25 posted on 05/11/2009 10:51:53 AM PDT by George from New England (escaped CT 2006; now living north of Tampa Bay)
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To: Kartographer

I recall a sci-fi novel I read in the ‘70s. I think it was written by Phillip K. Dick. Part of the story involved our protagonist landing on a planet where there was a society of excessive affluence. People spent and lived as they wished without regard to cost. When asked how they could afford it, it turned out they were incurring debt that would be repaid by the person’s 9th generation of descendants. Of course, outside the city were a bunch of miserable poor people living in squalor, and we found out that they were the 9th generation who were living as deadbeats, refusing to pay the just obligations of their ancestors.

The classic Sci-Fi authors had a way of expressing editorial comment on our society, sometimes well ahead of its time.


26 posted on 05/11/2009 10:55:09 AM PDT by henkster (The GOP is housebroken window-dressing displayed to portray the fiction of a Republic.)
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To: SeekAndFind

Is America about to go broke?.....

With Erkel in the drivers seat?....silly question!


27 posted on 05/11/2009 11:04:31 AM PDT by AngelesCrestHighway
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To: rabscuttle385

Let us see: $1.8 trillion of debt for the nation under Obama who he now says, Bush forced him to do this! 4 times the debt of 2008. And Bush bailed out all those banks, car companies, and put a Porkulas Bill together too? Ah, no. Now we find out that much of the so called Stimulus has not been targeted toward the most needy infrastructure problems. I want to see how many Ill., Chicago, or any minority communities get the dough and other needed states get zero.


28 posted on 05/11/2009 11:12:41 AM PDT by phillyfanatic ( iT)
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To: SeekAndFind
Who is to blame for the financial mess in which this country finds itself? In the end, it is the voters that share the greatest blame. They are the ones that elect the politicians and keep them in office. They voted for them because of greed. The politicians promised something for nothing and the electors voted them into office. The so-called free press, which has shown itself to be totally untrustworthy, carried the socialists' water. FDR started the trend by telling the people that it was the government's job to take care of them. Eventually, the government will fail and fall. The harsh reality of truth can only be hidden for so long before it shows its ugly head.
29 posted on 05/11/2009 11:17:07 AM PDT by Nosterrex
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To: SeekAndFind

“What we know is that all governments make promises they can’t fulfill.”

Not w/o the complicity of the electorate. The electorate in general has believed the lie that they can be enriched by allowing the govt to steal from their neighbors — a nation of idlers, coveters and robbers.


30 posted on 05/11/2009 11:19:06 AM PDT by 556x45
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To: SeekAndFind

“Government obligations for Social Security and Medicare may soon exceed the combined net worth of every household and nonprofit organization in the country.”

This is based on using a misleading 75-year time horizon. Using a more neutral “infinite” time horizon, we have already passed this point. Every person in the U.S. would need to pony up $369,000 TODAY to bankroll all the future promises related to SS/Medicare and the current national debt. http://conoverc.wordpress.com/


31 posted on 05/11/2009 11:19:36 AM PDT by DrC
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To: SeekAndFind

ping.


32 posted on 05/11/2009 11:22:59 AM PDT by lmr (God punishes Conservatives by making them argue with fools.)
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To: SeekAndFind
It could also be a banana-republic 10% a month.

I would guess that would be a number on the downside.

I am expecting Medicare to morph into Assisited Suicide while it will be illegal for the elderly to purchase health care on their own even outside the country. Of course, that will fix the SS problem in short order. I give it 5 yrs. max before the whole thing crumbles or they impose the sort of things that turn us into Zimbabwe. Naturally, the "elites" will be exempt from the laws the rest of us live by.

33 posted on 05/11/2009 11:37:30 AM PDT by penowa
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To: SeekAndFind; OB1kNOb; Nosterrex; DrC; All

Really worth watching:

http://www.iousathemovie.com/


34 posted on 05/11/2009 12:06:49 PM PDT by khnyny ("The demagogue is one who preaches doctrines he knows to be untrue to men he knows to be idiots.")
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To: Lexington Green
- we can always just print more money...we've got a limitless supply :0 trust in the messiah!
35 posted on 05/11/2009 12:07:10 PM PDT by Conservative Coulter Fan (I am defiantly proud of being part of the Religious Right in America.)
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To: SeekAndFind

We’re so broke we can’t even pay attention.. KMFDM


36 posted on 05/11/2009 12:12:28 PM PDT by MD_Willington_1976
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To: SeekAndFind

Our debt holders should devise a “Stress Test” for the US. It will not be pretty as the debt is uncoverable....


37 posted on 05/11/2009 12:14:10 PM PDT by Quick Shot
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To: knarf

“I don’t want an early in at 62, but will anything ne there at 65? 67?”

I am decades from retirement, so I am not faced with your decision; but I had just that same conversation with a friend who just turned 62. His conclusion, which I agree, is that in the near future SS payments will need to be reduced or eliminated for the “wealthy”—for those who have accumulated other savings. For example, he predicted that a person’s payment might be, say $3000 a month less other retirement income [company pension, 401K] that the person receives or is deemed to have received from just owning principal.

The long and short of it is that my friend figured he may not receive SS payments for long because the program will be going broke, so he took what he could up front.


38 posted on 05/11/2009 12:23:05 PM PDT by Stat-boy
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To: 556x45
Not w/o the complicity of the electorate. The electorate in general has believed the lie that they can be enriched by allowing the govt to steal from their neighbors — a nation of idlers, coveters and robbers.

Well, now wait a second. Let's not be too tough. A swing constituency was convinced that the Democrats had more and better to offer, upon a number of limited propositions (as in 1932).

Republicans had become demonstrably corrupt, formless, and agendaless in the majority in Congress, so voters tried to improve their representation with the phony "moderate Democrats" that Rahm Emanuel recruited to run against weak GOP incumbents.

Republicans allowed themselves to be snookered yet again by the East Coast Yacht Club, who always arrange open primaries in the East as the early contests, giving non-conservative, East Coast candidates like Rudy and Mitt an edge.

Too, remember that Obama ran a "blank screen" campaign (Tom Daschle admitted it, even before the election), onto which voters were invited to project their own aspirations, even as Obama made very few promises in the general election campaign. (And then he went back on some of them.)

So let's not beat up the voters too badly. They had a lot of help, steering them toward the Obamarats.

39 posted on 05/11/2009 1:00:19 PM PDT by lentulusgracchus
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To: Stat-boy
he took what he could up front.

Not that I have a lick of insight into this, but I'm thinking that there will be some sort of buy-out, eventually. There's got to be some way of getting people off of the rolls.

Of course, I live in reality. Unlike the government.

40 posted on 05/11/2009 1:21:50 PM PDT by wbill
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