So you don’t use credit cards, own your house free and clear and the car is paid off? You might be thinking you don’t have much in the way of debt. If Sheila Weinberg, chief executive for the Institute for Truth in Accounting is right, you are on the hook for more- a lot more:
The federal government’s long-term financial obligations grew by $2.5 trillion last year, a reflection of the mushrooming cost of Medicare and Social Security benefits as more baby boomers reach retirement.
That amounts to double the red ink of a year earlier.
Taxpayers are on the hook for a record $57.3 trillion in federal liabilities, or nearly $500,000 per household, a USA Today analysis found.
When obligations of state and local governments are added, the total rises to $61.7 trillion, or $531,472 per household. That is more than four times what Americans owe in personal debt such as mortgages.
The $2.5 trillion in federal liabilities dwarfs the $162 billion the government officially announced as last year’s deficit, down from $248 billion a year earlier.
"We’re running deficits in the trillions of dollars, not the hundreds of billions of dollars we’re being told," says Sheila Weinberg, chief executive of the Institute for Truth in Accounting of Chicago.
The article leaves us with this comforting thought:
Economist Dean Baker says the huge liabilities are potentially misleading because future generations will have greater income. "If we fix health care, then our deficits can be easily dealt with," he says
It would be nice to think that we can just leave the whole mess for future generations to clean up, but it’s all likely to come back to bite us before we can hand the bill to our grandkids- and maybe even our kids. Here’s hoping that they do make a lot more money than we do, because we’re going to need some help!
What a sobering reality. Maybe it’s time to stop all the handouts. Maybe it’s time to say boo hoo to the global economy. Maybe we just can’t afford illegal immigrants. In the red for $610000000000!!! I can’t even figure out the 0’s. The fan has been hit. Real smelly stuff.
Did Baker really say that? That just seems to absurd to be true. Future generations will not make enough to pay off that debt. It will carry a greater burden the longer it sits.
We also won’t fix healthcare. I don’t want to seem cruel, but universal healthcare is not a possibility with any positive financial results. It gets even more difficult when you consider that the US has a fat, lazy, smoking, drinking, sedendary, and generally unhealthy lifestyle. The growing obesity epidemic ain’t gonna help out the bottom line (financially speaking).
They sound a lot like the RE Agents of 2006 explaining Option ARMs. “But by then you’ll be making more!” Politicians have mortgaged our economy and our children’s future. Heaven help us when the resets come.
Igor says ruin
Ignore silly statistics like these. They are only gloom and doomer guesses (scare stories) extending out over something like 70 years.
Let’s stick to real estate here.
Take these numbers with a grain of salt. They are mostly unfunded social security obligations that will likely be defaulted on anyway. These “debts” are also spread out over 50 years, and not reflective of todays balance sheet. Yeah, defecits are high and getting higher, but they were higher in real terms thirty years ago. Keeping defecits as a constant percent of GDP is a better indicator. Its like when you were a kid if you had a $1500 debt you were in real trouble since you were making only $4 per lawn that you were mowing. Now as a working adult that $1500 isn’t so bad. Percent of GDP.
Does anyone really rely on the MSM for economic news and analysis? Isn’t that why we come to this blog?
Well I’m not paying… There is no way they can grab enough taxes from me to pay this bill and I will continue to do everything I can to legally avoid the tax man…
So I guess the rest of you will have to compensate for me
As an American who moved to Australia I’ve been more then impressed with Oz’s national healthcare system. Growing up and into my young adult life in the US (thru 2003) I lived under Kaiser Permanente primarily and Blue Cross for a year or two. My parents had good jobs (Informix, IBM, etc.) so I’m guessing these are amongst the best HMOs you can get in CA.
I can say without a doubt that the “commie pinko socialist” public healthcare system down here beats the crap out of those two HMOs hands down. In Oz, they focus on preventative medicine as opposed to cost minimalization. They seem to approach things as “let’s get it diagnosed and treated now” as opposed to the HMO approach of “eh… you’re not dead so it can’t be that bad… take some aspirin.”
American’s are always scared by “look at how bad Canada’s socialized medicine system is!”, and that’s pretty much the end of the debate. “Uhh… they said ’socialized’ that MUST be bad!”
If I get hurt (I’m a dual citizen now) anywhere in Australia, I go to the hospital and I’m taken care of. I don’t have to worry about my home, my car or my family’s financial future. I just get treated. Are the doctors/medicines/equipment/etc. as good down here? By in large yes. We’re not talking Cedar-Sinai, but they wouldn’t treat us plebs anyway!
The US is one of (the only?) top 26 industrialized nations without a national public healthcare system. Now ask yourself… it that for the benefit of the citizenry or for the benefit of the corporations? Here in Oz everyone pays a 1% income tax to support the health system. If you make over a certain threshold you are either required to pay an additional 1.5% excise or carry “private” health cover (which give you access to private hospitals - yes public and private CAN coexist despite what the candidates might say - and give you other things such as ambulance cover which is outside the public system). For 20 million Aussie’s this works well.
2.5% total potential tax and your medical worries go away. How much does your employer pay for your health cover?
America is a backwater on this subject, the sooner Americans figure this out and work to change it the better the nation will be. Merck and Pfizer will raise holy hell, but that’s because they are growing fat off the teet.
Land of Oz,
You make it sound so simple. Wow, what are we thinking. Now take 20 million and multiply times 15. That’s a lot of people. Now take into account that 20 million or so of those people have not had a job for many generations. I don’t know how it is in Oz but that’s a huge amount of handouts with no reciprocation. Now factor in 10-13 million 3rd world criminal aliens and the Land of Oz gets much tougher. That said, our health care system does suck.
You think you’re in debt now? Wait until you see the fallout from the Dodd-Shelby housing bailout.
freemonster
Australian unemployment is on par with us unemployment. About 5% plus or minus a .1 percent.
As far as cost goes - for the US median household income of $48,000 family income, at 3%, the annual premium would be $1460. I dare you to find a health insurance plan that costs a $121 a month, for a household of 4, or even an individual. Additionally, if we took the health insurance burden away from employers, they would be free to raise wages, or hire more workers. My health insurance for my family of 4 costs around $600 a month. For the median income family that is 15% of income. And that doesn’t include co-pays, deductibles and other out of pocket costs.
The US problem is the cost of health care. 1 MRIs at $1k could be traded for 10 early prevention doctor visits. Hundreds of thousands for bypass surgery, versus hundreds for preventative programs.
Ingydesu-
Preventive care does make a world of difference. My oldest was born in Japan. The city office was notified that I was expecting, and a public health care nurse showed up at the door to check on me. At the time Japan had the lowest infant mortality rate in the industrialized world. Prenatal care is cheap- dealing with the health problems of premmies is expensive.
I’ve often wondered how much the cost of healthcare has been inflated in the US due to people suing the pants off their doctor/drug company any time they don’t get better. People seem to have this view that doctors are all-knowing, highly trained specialists that know exactly how the human body works, and assume that if something goes wrong, the doctor should have known better. Sometimes, that’s true.. many times, it’s not.
Thanks Ingydesu, and to freemonster…
It’s always seemed counter-intuitive to me that things do not necessarily scale in a linear fashion and I’ll give you that (i.e. 2.5% over 20mil population != 2.5% over 300mil population) but the American system is broken (unless you’re in the upper 1% or higher and Cedar-Sinai will let you in).
I like the Aussie system, there are complaints (wait times for “elective” procedures) but there are also some things that are unheard of in the USA. For example my mother-in-law is taking care of her mom in-home, but the Aussie system gives here 4 weeks a year of respite care so she can have some time off. And they are looking to improve the dispensations to in-home carers! You’d just be shit outta luck in the states (or shit outta your home, car, savings and everything else you worked for in your life for care other then in-home)…
My point is that the “pinko commie socialist” universal state-run healthcare doesn’t have to suck, and in my experience is generally doesn’t, least not as much as the current US system. Americans would be much better off if more of us could learn to look beyond ourselves and our borders for solutions and ideas to what ails us.
despite being a diehard liberal, I find a lot to like with the mandatory private insurance cooked up in Massachusetts.
Socialized healthcare:
1. 1/3 of Americans are without healthcare which means most do not infringe upon the current infrastructure. If 1/3 of Americans enter the system (50% more), massive, profound expansions and improvements to infrastructure will have to be made. Is that cost already considered?
2. With a rapidly aging population, demands on the current system in its current state are going to become even more taxing and unable to be supported. Alone. Without adding another 50%.
3. If I could get it in writing that each US household will mitigate paying insurance premiums and costs for doctors visits, prescriptions, etc. for an annual $1500 cost only….sign me up. I have EXCELLENT health coverage and still pay about $1500 a year in premiums, chiropractor bills, and doctors visits - for MYSELF ONLY.
But wait, that’s not what will happen. The top overtaxed segments of the population that already have health coverage, will bear the burden. Liberals love to speak in AVERAGE terms as if everybody would shelter responsibility for what they receive. If you want a drug addict to stop using drugs, do you supply them with drugs? Of course not, subsidizing irresponsible behavior ENCOURAGES more bad behavior. See any parallels?
4. Much like in enterprise, when you remove barriers to entry, everyone enters. Very surprising, I know. So, every hypochondriac, every overweight person with diabetes or hypertension or heart problems, every person that doesn’t stay healthy because of lifestyle will obliterate a system that can’t support them. Much like a demand spike of 50% would obliterate a Just-in-Time inventory system.
5. Which brings me to my next point: The composition of the population in Australia is vastly different than the US. Their society is in far better physical condition. I recall reading an article last year about the government preventing an expat from moving there because she was too overweight and they specifically didn’t want people like that overburdening their essentially FREE healthcare system. I’m sure you can find it archived somewhere.
6. Who in their right, sane mind would believe that government could accomplish an implementation and maintenance like this? I would really like to hear an explanation citing examples of success on a large-scale to make me believe this.
7. Whether intentional or not, citing the unemployment statistics is disingenuine. When you re-examine the stats within those BLS reports, the figure is more like 10%+ and that’s not including the impact of the birth-death model. And this is just the beginning. People on food stamp assistance is at around 11% alone.
Igor word: Tragedy
If this is attempted, it will be.