State of Mankind

A New Way Of Thinking

The Debt Bomb!

http://www.weeklystandard.com/blogs/chart-america-s-capita-government-debt-worse-greece_631797.html

While reading through news stories the other day, I happened to see this graph (linked above) which suggests that our debt problem is worse than that of Greece.  It immediately caught my attention that this is a per capita measurement, which may be a little deceiving, as our per capita income is also higher than that of Greece.  A higher income would be able to withstand a higher debt.  So, I decided to look at the debt issue as a whole and give an update on the exact situation.  The following are CBO numbers, I’ll highlight a few important ones.

http://www.usdebtclock.org/#

Usdebtclock.org shows the National Debt at $49,190 per citizen (as of 27 Feb 2012).  This is $136,149 per taxpayer.  This does not include State and Local debts.  If you live in California, Illinois, New York, or some other near bankrupt state, you’ve got a double whammy.  That was the good news, now for the bad.  This is not the total US debt!  There is more debt in the form of retirement plans promised to Federal employees and Military persons, as well as promised benefits for Veterans.  These are not counted, because they don’t have to be paid immediately, but are promises we must keep.  These promises push the Total Debt up to 56.6 Trillion, and growing as does the Federal Government.  This is a total debt per citizen of $180,880 or $684,253 per family.  The average savings per family is $4,440.  Does your mortgage seem small?

Finally, this is not all!  We still have to look at what are called “unfunded liabilities”.  These are promises made by the Federal Government to each citizen in the form of Social Security, Prescription Drug Coverage (Medicare part D), and Medicare.  These, too, are not added because they will be paid over a number of years, not immediately.  However, they are not funded, so they will be part of the debt as they come due, or the government will simply refuse to pay (which technically they could).  Social Security has an unfunded liability of $15.5 Trillion, Prescription Drugs are at $20.5 Trillion, Medicare at $81.7 Trillion.  This makes total “Unfunded Liabilities” $117.7 Trillion.  If we add the $56.6 Trillion total National Debt with the $117.7 Trillion unfunded liabilities, we get a Grand Total of $174.3 Trillion dollars of promises with no way to cover them, except taxing you and me to the nth degree, or having the government run the entire economy. See: http://www.stateofmankind.com/tragedy-and-hope-review/x-the-economy/.

Those who support greater government debts always seem to say that we have always had seemingly high unfunded liabilities and it hasn’t yet collapsed.  I would say that in the past, we have had population and corresponding economic growth that cannot be the case forever.  Those who think this won’t collapse just need to do a little math, or talk to someone who lives in Greece!

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