We won't be able to pay for anything in 2040

Another thing in the governments financial statements that might interest you:

http://www.gao.gov/financial/fy2007/guide.pdf

Go to page 3 and look at the chart with the appropriate name: "Current Trends are Not Sustainable". The government predicts that with our current spending habits (remember this is from 2007 so it does not include our hundreds of billions in bailouts) in 2040 the government will be able to pay for interest on the debt, Social Security, Medicare and Medicaid and NOTHING ELSE.

Does that not disturb anyone?

Political Reality

There are many things that bother me about politics, but what gets me most is that politicians never talk about the SERIOUS issues that affect our country. So much emphasis seems to be put on abortion, gay marriage, other politician’s friends or how many houses someone has. I’m not saying that these issues are not important; I am saying there are many more pressing issues.

One issue that no candidate even seems to pay lip service to is our massive national debt. McCain and Obama both say their plans are “budget neutral” (which I doubt will actually be the case), but neither of them talk about actually paying down this debt. I am sure plenty of people know about our $11,000,000,000,000 national debt, but that number is not really accurate.

Here is the real deal:

If you ever had a job, you will notice that 7.65% of your pay check goes to Social Security and Medicare. Now this money is not really income to the government, because it is assumed you are simply paying into this system so you can collect when you are older. Herein lies the problem.

We are currently running a surplus in our Social Security system, which we use to pay the government’s operational budget. We have this surplus because right now we have a relatively young population. That is going to change drastically when the Baby-Boomers retire. The same is true with Medicare.

Take a look at the 2007 financial statements of the US government: http://www.gao.gov/financial/fy2007/finstatement.pdf

Check out page 13 and 14. Let me explain these numbers to you. Look at the number for Social Security that says, “Present value of future expenditures in excess of future revenue”.

You see, the government makes predictions of how much money they will have to pay in Social Security and how much they will get in future revenue. They present value that number back at treasury rates and it comes to almost $7 trillion dollars. What that means is that for us to meet all our future obligations for Social Security we would have to invest $7 trillion dollars today. To pay for Medicare we would have to invest over $30 trillion dollars today.

Where are we going to get this money? Keep in mind that these are the numbers from 2007. The present value of future obligations for 2008 is $56 trillion! And that does not include all the fun Washington has had bailing out Wall Street.

Every year we wait to deal with this problem the deficit gets bigger and bigger. But no president or congressmen wants to either cut spending or raise taxes to deal with this problem. All they care about is getting reelected, so they worry about the present and push this massive problem down the road.

Young people need to realize that they will not be getting Social Security or Medicare benefits. This country is completely bankrupt and our politicians are to short-sighted to do anything about it.