Posted on 02/22/2012 8:57:11 AM PST by SeekAndFind
With seemingly every day bringing more bad news from Europe, many are beginning to ask how much longer the United States has before our welfare state follows the European model into bankruptcy. The bad news is: It may already have.
This year, the fourth straight year that we borrowed more than $1 trillion to support the U.S. government, our budget deficit will top $1.3 trillion, 8.7 percent of our GDP. If you think that sounds bad, it’s because it is. In fact, only two European countries, Greece and Ireland, have larger budget deficits as a percentage of GDP. Things are only slightly better when you look at the size of our national debt, which now exceeds $15.3 trillion, 102 percent of GDP. Just four European countries have larger national debts than we do — Greece and Ireland again, plus Portugal and Italy. That means the U.S. government is actually less fiscally responsible than countries like France, Belgium, or Spain.
And as bad as things are right now, we are on an even worse course for the future. If one adds the unfunded liabilities of Social Security and Medicare to our official national debt, we really owe $72 trillion, by the Obama administration’s projections for future Medicare savings under Obamacare, and as much as $137 trillion if you use more realistic projections. Under the best-case scenario, then, this amounts to more than 480 percent of GDP. And, under more realistic projections, we owe an astounding 911 percent of GDP.
Meanwhile, counting both official debt and unfunded pension and health-care liabilities, the most indebted nation in Europe is Greece, which owes 875 percent of GDP. That’s right, the United States potentially owes more than Greece. France, the second most insolvent nation in Europe, owes just 549 percent of GDP. Even under the most optimistic scenario, we owe more than such fiscal basket cases as Ireland, Italy, Portugal, and Spain.
So far we have been able to avoid the consequences of our profligate ways because the very public turmoil in Europe has helped prop us up as the world’s safe haven for foreign investment. Compared to the euro’s problems, the dollar looks pretty safe. This means that others are still willing to lend us money at absurdly low rates. But that won’t last forever. In fact, already seven European countries, including Germany and Sweden, have better credit ratings than the U.S.
Perhaps we can take some solace in the fact that our welfare state is not yet as big as Europe’s. But the key word here is “yet.” Today, our federal government spends more than 24 percent of GDP. Throw in state and local spending, and government at all levels consumes over 43 percent of everything produced in this country over the course of a year. As bad as that is, it’s still less than Europe, where the average of government spending at all levels is slightly more than 50 percent of GDP. But the Congressional Budget Office projects that federal-government spending in this country is currently on a path to exceed 42 percent of GDP by 2050. Government spending at all levels will exceed 59 percent of GDP. And CBO assumes state and local spending will decline in the future, which seems unlikely.
By way of comparison, today, Ireland is the only country in Europe with a bigger government than the U.S.’s will be in 2050. That’s right, one can look at countries like France and Greece, or even Denmark and Sweden, and realize that we will eventually have bigger governments than those quintessential welfare states have today.
At that point does the United States cease being the United States as we have known it? At the very least, can our economy survive such a crushing burden of government spending, and its attendant level of taxes and debt?
Given this looming disaster, President Obama has just submitted a budget that explicitly rejects “austerity,” avoids any reform of Medicare or Social Security, and adds some $7 trillion to the national debt over the next ten years. And Republicans? They are busy debating the pros and cons of birth control.
What is wrong with this picture?
— Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.
What is wrong with this picture?
They are doing what Republicans get paid to do - defending the Holy Welfare State by changing the subject.
You didn't think the Washington Generals were a real opponent for the Globetrotters, did you? :)
The media is using this retarded contraception issue as a red herring to distract from the mess Obama is making.
Americans are not Europeans. Ergo...
is this wrong?...I’d rather my tax dollars to be spent on interest on the debt more than being spent on more welfare.
It’s okay: Americans love high taxes.
That’s why we keep voting for them. :)
Oh please, we can just print all the money we need.
I pointed out the fact that to some degree (and growing) that we are all greeks now and that the world’s economy is on life support and the doctors are all ‘quacks’ and crooks! But I was surprised by the skeptsim of those who don’t seem to see it.
If the present spending continues I don’t see how we can avoid a collapse like that of Argentina ( http://www.youtube.com/watch?v=7yerKMQc7-w&feature=grec_index )but on a global scale.
But the market is up you say, yeah it’s up using billions in ‘printed’ money in the hands of corrupted bankers, investors and their cronies. The world is now flooded with fake and faux money. The game is so rigged and now even the ‘house’ is starting to lose.
When the whole thing tanks as it will what do you think the entiled class will do when they can’t get their cell phones, their food stamps and EBT cards, rent vouchers and so forth.
What we will see is a much more violent version of Argentina, (checkout what is going on in Greece).
American has an even a larger entitlement minded population and much more violent and armed onen than Argentina or Greece.
I see many many small business wiped out by flash mob looting, and see rape, robbery and murder for murder sake. Many of these ‘yutes’ will think no more about killing you than most people think about stepping on a roach. That will be the test of many. Most preppers I know are Christian people and they will hesitate to do what they might have to do to stop the ‘yutes’. On the other hand the ‘yutes’ won’t think twice nor lose a minute of sleep, in fact they will smile and laugh about it.
Think of this quote which is one of my favorites:
“Star Trek: Deep Space Nine: The Siege of AR-558 (#7.8)” (1998)
Quark: Let me tell you something about Hew-mons, Nephew. They’re a wonderful, friendly people, as long as their bellies are full and their holosuites are working. But take away their creature comforts, deprive them of food, sleep, sonic showers, put their lives in jeopardy over an extended period of time and those same friendly, intelligent, wonderful people... will become as nasty and as violent as the most bloodthirsty Klingon. You don’t believe me? Look at those faces. Look in their eyes.
On top of all who knows how many saboteurs (Islamic, Chinese etc) and sleepers have crossed our borders and are now just waiting to cause havoc.
For those who are just starting or are old hands at prepping you may find my Preparedness Manual helpfull. You can download it at:
http://tomeaker.com/kart/Preparedness1j.pdf
NOTE! THIS IS A FREE DOWNLOAD. I DO NOT MAKE ONE CENT OFF MY PREPAREDNESS MANUAL!
For those of you who haven’t started already it’s time to prepare almost past time maybe. You needed to be stocking up on food guns, ammo, basic household supplies like soap, papergoods, cleaning supplies, good sturdy clothes including extra socks, underwear and extra shoes and boots, a extra couple changes of oil and filters for your car, tools, things you buy everyday start buying two and put one up.
As the LDS say “When the emergency is upon us the time for preparedness has past.”
Or as the bible says: A prudent man sees danger and takes refuge, but the simple keep going and suffer for it.
NIV Proverbs 22:3
Lastly this for the doubters and the scoffers.
“There is no greater disaster than to underestimate danger.
Underestimation can be fatal.”
I just published a book called “Biflationary Depression: Protecting Assets From Inflation & Deflation In A Keynesian Collapse”. It contains groundbreaking stuff, including a Biflationary Index that shows just how screwed we are. We haven’t bottomed out yet by any means.
When you research for a book like this, you look at all the numbers and they give you nightmares. Look at the Biflationary Index here; http://www.futurnamics.com/biflation.php
Those of us who are awake and aware are already active. We are also not enough of a force compared to the gimme-gimme types out there.
This situation will get worse. There is no fixing it this side of outright collapse.
I would dearly love to be proven wrong.
Republicans have been hammering the message of the debt/deficit for months...make that years.
We can handle 2 messages at once (though I agree that you have to pick your issues carefully). The assault on religious freedom is a pretty big issue as well.
RE: Americans are not Europeans. Ergo...
We’ll have to see if this is true this coming November...
Bracko Bama without doubt has been the worst disaster to fall on this country.
However he didn’t do it alone he had plenty of help from both parties.
William Flax
No! But we used to represent the most energetic of the European stocks, who came here to build prosperous societies in a virtual wilderness. Now, even as we have forgotten the social values that made our prosperity possible, we are allowing millions from stocks that have never achieved at such a level, from South of the border, to come here illegally, with massive further damage to our economy, social cohesion & continuity of basic values.
Europe, for a change, is starting to rethink the madness of some of her policies, both economic & demographic. How it all plays out is not clear; but we are digging a hole for all that Conservatives cherish.
We must return to the premises that made us great or we will go the way of Rome in a fraction of the time it took Rome to self-destruct.
William Flax
No it won't.
Then, even moreso than now, the Federal Reserve will just print it.
But, as the supply of dollars in existence approaches infinity, the value of each dollar approaches zero.
Contemplate what that means.
—Those of us who are awake and aware are already active. We are also not enough of a force compared to the gimme-gimme types out there.—
My risk mitigation is as follows: To get to my small farm in Kentucky, the urban masses will have to get through 80 miles of people like me. It will cull the herd.
Birth Control has become a hot issue for two reasons:
- it has backed the Catholic Church into a position where they are now almost going to have to choose sides against the Democrats, or allow themselves to be sublimated to becoming subservient to an out-of-control state. (this is really about the First Amendment and Religious Liberty, not birth control)
- It is yet another one of Obama’s giveaway freebies that the country can’t afford and which will have to be reined in if we don’t want to become Greece. (could be food stamps, cell phones or Tootsie Rolls, anything the gubbermint is giving away for “free”)
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