Last updated on December 18th, 2013
It is one thing to accumulate some debt IF there is sufficient growth to substantiate repayment of that debt, but it is quite another to be accumulating debt when there is little or no growth to insure repayment of that debt.
Would a bank give a loan to someone who is already ‘underwater’ and spending more than they take in? NO! They would not.
Why then is the United States spending far more than it takes in, and accumulating a massive ‘credit card’ debt?
You must see this cart… to see how up the creek we really are…
The answer of course is because we live in a nation of fools (sorry to offend you, but you keep voting these people into office)…
…and the United States can simply print more money whenever it wants (with complete disregard for the fact that we the people (and future generations) are saddled with this unfathomable debt).
How many of the sheeple think that the fiscal crisis is over, now that the government shutdown is over and the can has been kicked down the road?
It’s as if I had $250K in credit card debt and I told my wife, “Great news, honey — our fiscal crisis is over! I just got a new Visa!” If she didn’t hit me over the head with a rolling pin, she would most assuredly tell me where I should place it.
It’s an imperfect analogy, but imagine the green is your salary, the yellow is the amount you’re spending over your salary, and the red is your MasterCard statement. Before sharing this info with your spouse, I recommend you hide the rolling pin.
The chart above portrays an unsustainable path. Ignoring the facts will not change them. This isn’t a Republican problem or a Democrat problem. It’s an American problem.
It took 192 years for the country to accumulate $1 trillion in debt. It has taken us 30 years to accumulate the next $16 trillion of debt. We now add $1 trillion of debt per year.
If the Federal government was required to use GAAP accounting, the annual deficit would amount to $6.7 trillion per year.
The fiscal gap of unfunded future liabilities for Social Security, Medicare, Medicaid, and government pensions is $200 trillion.
Using realistic growth assumptions adds another $6 trillion of state and local government unfunded pension benefits to the equation.
The Federal government has increased their annual spending from $1.8 trillion during Bill Clinton’s last year in office to $3.8 trillion today, a 110% increase. The population has increased by 12% over that same time frame, and real GDP has advanced by 25% since 2000.
Defense spending has increased from $358 billion in 2000 to $831 billion today, despite the fact that no country on earth can challenge us militarily.
The average Baby Boomer will receive $300,000 more than they contributed to Social Security and Medicare over their lifetime. Over 10,000 Boomers per day will turn 65 for the next 17 years.
The Social Security lockbox is filled with IOUs. The funds collected from paychecks over the last 80 years were spent by Congress on wars of choice, bridges to nowhere, and thousands of other vote buying ventures.
A normalization of interest rates to long-term averages would double or triple the interest on the national debt and increase our annual deficits by at least 30%.
Obamacare and the unintended consequences of Obamacare will add tens of trillions to our national debt. The initial budget projections for Medicare and Medicaid showed only a modest financial impact on the financial situation of the country. How did that work out?
Entitlement spending in 2003 was $1.3 trillion. Entitlement spending in 2008 was $1.7 trillion. Entitlement spending in 2013 was $2.2 trillion. Entitlement spending in 2018 will be $2.8 trillion, as these programs are on automatic pilot.
When you consider the facts in a rational manner, you come to the conclusion that we’ve passed the point of no return. Decades of bad choices, bad leadership, bad men in important positions, bad education, bad governance, and bad citizenship have led to bad times. But very few people, across all socio-economic classes, have any interest in understanding the facts or making the tough choices required to save future generations from a life of squalor. We willfully choose to ignore the facts.
Our degraded and ignorant society is incapable of comprehending their dire circumstances or acting for the common good of the country. We are a nation on the take. Greed really is good. Everyone needs to play the game. From the top floor corporate CEO suite to the decaying urban wastelands, we have chosen comforting ignorance to uncomfortable knowledge. Our warped form of democracy enriches the few at the top, while dispensing enough subsistence payments to the lower classes to keep them from revolting, while enslaving the middle class in debt and convincing them it’s really wealth.
-theburningplatform.com, Culture Of Ignorance
Ignorance is bliss; but only until it isn’t.
Are you prepared for the coming collapse?