29 November 2012

True US Debt ~ $87T = 550% GDP = $8T/Yr Tax

Bipartisan commissioners on entitlement and tax reform, Chris Cox and Bill Archer, shock us with facts in their WSJ OpEd piece Why $16 Trillion Only Hints at the True U.S. Debt...
"For years, the government has gotten by without having to produce the kind of financial statements that are required of most significant for-profit and nonprofit enterprises [...] it does not include the unfunded liabilities of Medicare, Social Security and other outsized and very real obligations. [...] We most often hear about the alarming $15.96 trillion national debt (more than 100% of GDP), and the 2012 budget deficit of $1.1 trillion (6.97% of GDP). As dangerous as those numbers are, they do not begin to tell the story of the federal government's true liabilities. The actual liabilities of the federal government -- including Social Security, Medicare, and federal employees' future retirement benefits -- already exceed $86.8 trillion, or 550% of GDP. [...] When the accrued expenses of the government's entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually. [But] if the government confiscated the entire adjusted gross income of these American taxpayers, plus all of the corporate taxable income in the year before the recession, it wouldn't be nearly enough [...] to fund the growth of U.S. liabilities."
This means political malfeasance and governmental incompetence of titanic proportions. We need a new generation of leaders in DC to steer the ship of state, which means electing more reality-minded and ethical people like MIT alumnus Representative Tom Massie!

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