More than a little scary, this:
I have argued that the real national debt is about $130 trillion. Let's say I'm being pessimistic. Forbes, in a 2008 article, came up with a lower number: $70 trillion. Let's say the sunny optimists at Forbes got it right and I got it wrong.
For perspective: At the time that 2008 article was written, the entire supply of money in the world (“broad money,” i.e., global M3, meaning cash, consumer-account deposits, checkable accounts, CDs, long-term deposits, travelers' checks, money-market funds, the whole enchilada) was estimated to be just under $60 trillion. Which is to say: The optimistic view is that our outstanding obligations amount to more than all of the money in the world.
Global GDP in 2008? Also about $60 trillion. Meaning that the optimistic view is that our federal obligations outpace the entire annual economic output of human civilization.
So, what the hell, who cares about another paltry $50 billion in "stimulus" spending? It might make us crash and burn a week or two sooner, that's all.
Comments
Very large numbers, but totally inaccurate. Let us start with what we do know.The National debt stands at $13.54 Trillion. This includes the Social Security and Medicare Trust funds that were invested in U.S. Debt.
The writer contends that unfunded teacher pensions total roughly $4 Trillion, $2.5 Trillion in state debt and a whopping $106 Trillion for Social Security and Medicare.
The writer assumes many things:What is debt, obligations and promises? Promise is just that, something that can be broken at any time without any cost. Obligation would be something one is obligated to pay. The $130 Trillion value is the sum total of debt, obligations and promises.
In 1984 after the Greenspan Commission recommendations were implemented, Congress passed a little known legislation.
Social Security by law cannot borrow money. It has statutory authority to spend only those funds received from the dedicated social security tax on wages, tax on benefits and funds in the trust fund. Federal Law prohibits transferring general revenues to any trust fund. United States Code Title 42, Chapter7, Subchapter VII, Sec. 911 (a),
http://www4.law.cornell.edu/uscode/42/911.html
By law the trust fund cannot be drawn down to zero. The trustees must submit a report promptly to congress detailing benefit cuts or tax increases when in any given year the
trust fund is projected to fall below 20% of that given years expenses. Social Security's ability to pay future promised benefits is dependent solely on the ability to raise social
security taxes. United States Code Title 42, Chapter7, Subchapter VII, Sec. 910 (a),
http://www4.law.cornell.edu/uscode/42/910.html
These sections were added to the Social Security Act because they knew that the Greenspan Commission patch was only that, a patch and that by 2064 Social Security would face the same problem once again that it has four previous times, that is running out of money. So they made it impossible for Social Security or Medicare to borrow money.
Take a very close look at your Social Security Earnings and Benefit Statement, page 1. If nothing is done they can pay ~75% of promised benefits.
I forgot to add one thing. Each year Social Security send workers a wage and benefit statement. Take a close look at page one, normally right column. There is a statement that states that if no changes are made that Social Security can pay 75% of PROMISED BENEFITS. No where does it state it will pay 100% of promised benefits. The reason is the legislation in 1984.
So the question for all workers is, do I support Social Security now and take the risk that in the year you retire, Social Security will implode and you receive nothing or do I cut my losses and those of my children by supporting repealing the Social Security Act now? Keep in mind there are 117 million potential voters under age 46 and that even with seniors and boomers, they number just under 90 million. The single largest voting block is those who do not vote. What will it take before this group figures out they out number everyone else combined and that they are being taken advantaged of?