GOVERNMENT DECEPTION ABOUT GOVERNMENT FINANCES
April 8, 2009
Congressional deception about government finances means today's children will face a financial disaster that will make today's mess seem like a walk in the park. What's called the public debt stands at $11 trillion and growing. That pales in comparison to the federal government's unfunded liability -- obligations that are not covered by an asset of equal or greater value, says economist Walter Williams.
Mike Whalen, policy chairman of the National Center for Policy Analysis, commenting on last year's Social Security Trustees annual report on the state of the Social Security and Medicare programs, said, "The report on the state of entitlement programs is rather grim -- the combined unfunded liabilities of both programs are $101 trillion."
- What that means is that in order for government to make good on its promises, Congress would have to put aside tens of trillions of dollars in the bank today; keep in mind that our gross domestic product (GDP) is only $14 trillion.
- In the absence of massive tax increases or cuts in benefits, in order to meet its promises Congress must cease spending on one in four programs by 2020, such as education and highway construction, and one in two by 2030, and by 2050 or so all federal revenue will be spent supporting Social Security, Medicare and prescription drug benefits. Such a scenario is unsustainable.
There will be economic and political chaos, says Williams. Today's politicians are not likely to take measures to avoid the coming chaos because senior citizens, the major beneficiaries of Social Security and Medicare, vote in large numbers and will exact a high political price. Plus, neither today's senior citizens nor today's politicians will be alive in 2050.
Williams recommends that today's seniors put pressure on Congress to allow those Americans who want nothing to do with Social Security to opt out.
Source: Walter Williams, "Government Deception About Government Finances," Capitalism Magazine, April 8, 2009.
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