Thursday, July 01, 2010

Federal Debt Just Keeps Getting Worse

The national debt picture continues to get worse and worse, as we can see from this USAToday article below. However, just in case you thought it was bad that the US national debt [supposedly] hit the $13 trillion mark recently, there's more bad news. The REAL national debt is more like $74 trillion (!), as we'll see below:
Article from USA Today:

The men and women charged with figuring out how to reduce federal deficits and debt got some more bad news this morning: the numbers keep getting worse.

That was the news from the non-partisan Congressional Budget Office, which for the firsttime took into consideration the new health care law, heralded by President Obama and Democrats for reducing deficits in the long run.

The report doesn't contradict that. It simply points out that any long-term savings from the health care law, such as from Medicare savings, aren't enough to turn deficits around.

Moreover, the report casts doubt on whether Congress will stick to the tougher aspects of the law. If it doesn't -- for instance, if it doesn't cut Medicare payments to doctors -- the fiscal picture will be far worse.

First, the numbers: Debt held by the public will rise from 62% of the economy to 79% over the next 25 years. If assumptions are made about what Congress is likely to do -- for instance, maintain some tax cuts and avoid Medicare cuts to doctors -- that percentage will increase to 185% of the economy in 2035.

CBO Director Douglas Elmendorf told President Obama's fiscal commission that health care costs remain the primary problem. The health care law passed this year, he said,"made a dent in the problem but did not substantially diminish that challenge."

The 18-member bipartisan fiscal commission is charged with proposing changes that
would reduce the federal budget deficit -- $1.5 trillion -- and the cumulative national debt
-- $13.1 trillion.
(full article here)

Now in case you think a $13 trillion debt is an outrage (and it IS), then hold on to your seat. This next article shows why the real debt is more like $74 trillion.

Of course we could go on a long rant about why our leaders have dug us into a deep hole that will  only lead to economic calamity. But the real outrage is that most of the American sheeple as a whole have been asleep at the wheel, and allowed this to happen right under our collective noses!

From the Idaho Freedom Foundation:

Budget expert says national debt is $74 trillion, not $13 trillion

May 25, 2010 | posted by Jay Howell 

Lately, we've been hearing a lot about how the national debt is approaching the $13 trillion dollar mark.  But one accountant who’s been studying the federal deficit and national debt for nearly 20 years says $13 trillion is just a fraction of our real national debt, which is closer to $74 trillion.

According to, “National Debt” is defined as “the sum of all previously incurred annual federal deficits.  Since the deficits are financed by government borrowing, national debt is equal to all government debt outstanding.”  But according to Sheila Weinberg, CEO and founder of the Institute for Truth in Accounting, in order to accurately calculate the nation’s debt load, unfunded liabilities such as Medicare, Medicaid, veterans’ benefits, etc., must be figured in.

Weinberg said when the government cites the national debt as “only” $13 trillion, it's a bogus number.  “The big programs, Social Security and Medicare, they’re eating a huge part of the debt.  Ask your readers if they believe the government owes them Social Security and Medicare benefits.  If they do, then the real number is actually $74 trillion.”

Weinberg said the government doesn’t consider that they “owe” Social Security and Medicare benefits beyond the checks they’ve already written.  In fact, in the U.S. Treasury’s 2008-2009 “Notes to the Financial Statements” report, it specifies in Section R (Social Insurance):

“A liability for social insurance programs (Social Security, Medicare, Railroad Retirement, Black Lung, and Unemployment) is recognized for any unpaid amounts currently due as of the reporting date. No liability is recognized for future benefit payments not yet due.” (emphasis ours)

Link to full article here.

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