Entitlement Programs are Swamping Ship of State
GAO Chief: Medicare and Social Security face $53 trillion deficit
Massive tax increases likely
You should probably forget about buying that new house, car, kitchen gadget, sex toy, roll of toilet paper, box of corn flakes or whatever, because you--every American--are in massive debt and won't be able to afford anything. And we're not talking about your current mortgages or credit card bills. No. The federal government's reckless spending on more and more entitlement programs is so pervasive that just keeping Medicare and Social Security solvent for the next 20 years will require an extra $53 trillion!
So says David Walker, comptroller general of the United States and head of the Government Accountability Office, the non-partisan watchdog of federal government and the nation's finances. In a report this week called A Call for Stewardship, Walker detailed the horrible state of the nation's financial affairs.
"If the (page 1) federal government were a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up," Walker says.
"Candidly, ( page 2) our current deficit and debt levels are not unduly troubling as a percentage of our national economy. However, these deficit levels and related debt burdens are set to escalate dramatically in the near future due to the retirement of the 'baby boomers' and rising health care costs. The fact is, absent any meaningful reforms, America faces escalating deficit levels and debt burdens that could swamp our ship of state!
"This brings me to the longer-range picture. Believe it or not, the federal government's total liabilities and unfunded commitments for future benefits payments promised under the current Social Security and Medicare programs are now estimated at $53 trillion, in current dollar terms, up from $20 trillion in 2000. This translates into a defacto mortgage of about $450,000 for every American household and there's no house to back this mortgage! In other words, our government has made a whole lot of promises that, in the long run, it cannot possibly keep without huge tax increases."
Walker goes on in the report to explain what most Americans don't realize and haven't taken the time to understand: that Social Security--the retirement program that just about every American depends on--has been ripped off by your congresspeople and senators. The program constantly runs a surplus, but rather than investing that money and letting it earn interest for you and me, congresses and presidents have spent it. In effect, they've gone into your cookie jar, taken your money, and left you a worthless IOU.
Here's how Walker explains it:
"After all, the federal government spends the entire Social Security surplus on various government operating expenses and replaces the cash with government bonds held in so-called government 'trust funds.' Given their structure, in my view, they should be called 'trust the government funds.'"
If that's not scary enough, listen to this about how much of the federal budget goes to entitlement programs:
"If trillions of dollars aren't big enough to get your attention, believe it or not, in fiscal 2007 over 62 percent of the federal budget was on 'auto pilot' and this percentage is on the rise! Shockingly, the major functions expressly envisioned by our Founding Fathers as a proper role for the federal government--things like national defense, homeland security, foreign policy, the treasury function, the federal judiciary, the Congress and the Executive Office of the President--are in the remaining 38 percent of the federal budget! And this portion of the budget is set to get squeezed."
Walker says that most Americans are in denial about their and their government's dismal financial situations.
"Unfortunately, many Americans are in denial about the seriousness of our situation," he says. "Relatively low interest rates and modest inflation rates are partly to blame for this false sense of security. The truth is, too many American families are following the poor financial practices employed by the federal government. They're spending more money than they make, taking on more debt and incurring compounding interest costs. Both America and many Americans have become addicted to debt both in good times and bad."
Read the report; it's only 10 pages. And then start asking your idiot, pandering, spineless senators and congresspeople what they're going to do about the situation.