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Home / Legislative Action Center / Issues - Budget & Taxes / America's Federal Debt is Beyond Comprehension |
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America's Federal Debt is Beyond Comprehension |
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Written On: Friday, August 22, 2008 |
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Written By: Don C. Brunell |
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Shortly after the 2004 election, President Bush challenged the nation and Congress to address the Social Security crisis. The numbers show that our nation's retirement system is headed for a major train wreck.
But rather than address the issue, Democrats in Congress attacked the president's proposal to allow young people to invest part of their Social Security taxes in their own personal 401(k) programs. That was one solution that would allow young people to hedge their retirement in case Social Security fell from the wall and broke apart like Humpty Dumpty.
Unfortunately, the reforms withered on the vine, as did the discussion. Nobody wants to talk about the problem. Nobody, that is, except Rep. Paul Ryan (R-Wisconsin), the ranking Republican on the House Budget Committee. Ryan says the federal government is headed for bankruptcy if it continues on its present course.
Ryan cites an estimate by the non-partisan Government Accountability Office (GAO) that says the government faces a $53 trillion shortfall to cover the costs of promised benefits in its entitlement programs.
“They say we are $53 trillion short of fulfilling the promises the government is making to the American people, in today’s dollars,” says Ryan.
The former Comptroller General of the United States, David Walker, has been saying much the same thing, making it his main priority since leaving office. Walker points out America not only has a large deficit but the real problems are off balance sheet obligations.
For example, the U.S. has more than $44 trillion (that is 44 plus 12 zeros) in unfunded obligations to Medicare and Social Security alone — our country's retirement and health care system for retired citizens. Add that to the current liabilities and it soon bloats to $53 trillion, as of September, 2007. And, if predictions are correct, our debt is now in the range of $55 to $56 trillion.
Walker figures $53 trillion will cost the average American household $455,000. Since the average family income is $50,000, that is an implicit mortgage of over nine times their yearly income.
That’s one heck of a credit card bill our children, grandchildren and great grandchildren will have to pay! What a legacy to leave the next generation, many of whom are simply struggling to pay off thousands in college loans.
The figures are so enormous that people simply cannot wrap their minds around how huge the debt is. Just how much is 55 trillion? A stack of 55 trillion $1 bills would stand more than 3.7 million miles high. Laid end to end, 55 trillion $1 bills would stretch to the moon and back more than 10,000 times.
To give you another perspective, you’d have to watch the clock for 1.7 million years to get to 55 trillion seconds. Going back in time, that would be in the middle of that last Ice Age when glaciers covered much of the Earth’s surface.
Ryan says that to deal with this situation, the government must either reform the entitlement programs or eventually impose massive tax increases.
“By the time my three children — who are three, five and six years old —are my age, the federal government will have to tax 40 cents out of every dollar made in America just to pay the bills for the federal government at that time,” Ryan says.
“Those would be the tax rates you would have to have if you wanted to tax your way out of this problem,” he says. “And if you did that, all experts conclude, you would literally crash the American economy.”
Ryan maintains that the only viable answer is to reform the government’s massive entitlement system.
But Congress treats Medicare and Medicaid as the classic “third rail” of politics. Like the electrified third rail of a subway system, many politicians believe that touching America’s entitlement programs would mean instant political death.
But ignoring the problem – essentially kicking the can down the road — will only shift the impossibly crushing burden to our children, grandchildren and great grandchildren.
Those who seek to muzzle the president by criticizing his reform proposals ought to think about that.
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