Inquiring minds are reading about two people they have noted before: Laurence Kotlikoff, an economist at Boston University and Andrew Moylan, director of government affairs for the National Taxpayers Union. In “US Government ‘hiding true amount of debt’” Both see a deceiving federal government keeping the citizens in the dark about the national debt:
Mr Kotlikoff and Mr Moylan agree US national debt is much more than the official $US13.4 trillion number, but they disagree over how to add up the exact number.
Mr Kotlikoff says the debt is actually $US200 trillion.
Mr Moylan says the number is likely about $US60 trillion.
The second (Moylan’s) number is probably more accurate as to what would incur in any situation short of a complete meltdown. The higher number from Kotlikoff includes everything. For instance, it includes ALL of the government guarantees on all loans. It is more a maximum since not all loans would/will go bad and not all future unfunded liabilities would be defaulted on. An example of this would be when Congress changes Medicare to a lower level of care. All future liabilities disappear.
To see how quickly debt projections go from the Governments $13.3 Trillion to $60 or even $220 Trillion:
The CBO estimates the debt will be at $US16.5 trillion in two years, or 100.6 per cent of GDP.
But these numbers are incomplete.
They do not count off-budget obligations such as required spending for Social Security and Medicare, whose programs represent a balloon payment for the Government as more Americans retire and collect benefits.
In the case of Social Security, beginning in 2016, the US Government will be paying out more than it is collecting in taxes.
Without basic measures – such as payment cuts or higher payroll taxes – the system could be on the road to bankruptcy, according to officials.
“Without changes,” wrote Social Security Commissioner Michael Astrue, “by 2037 the Social Security Trust Fund will be exhausted. There will be enough money only to pay about $US0.76 for each dollar of benefits.”
As mentioned before…round and round it goes, where it stops…nobody knows.
But when the music stops (and it most assuredly will stop), it will be a very ugly fall.
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