National debt is so much higher than you think
Sometimes old news continues to be news because the old news deals with debt problems and the problems are still here with us today.
Take for example the big news during the Bush years, and specifically January 2007. The news in the O.C. Register was on the hugh debt owed by the American people to cover the deficit in Social Security and Medicare. How can we fund these programs and provide the security that was promised?
To understand where we were then you need to remember the facts that were presented at that time and conclude that it is worse now. Social Security was underfunded by some $10 trillion and Medicare was underfunded by another $10 trillion. Add those two numbers to the $8 trillion national debt at that time and in 2007 we were in debt for $28 trillion dollars with an annual debt payment of $1.4 trillion. That was 2 ½ years ago, and you and I know that the debt on all three has increased.
I have paid the maximum amount into Social Security since about 1974, and I made additional contributions prior to that. I didn’t volunteer that deduction as it was automatically taken from my payroll check. Based upon the amount of money I paid into the system I have earned about 1% on my money.
Looking back to 1948, there were about 50 workers for each retired person. In 2007 the ratio was three working for every one receiving benefits. Now it is closer to two people working for every recipient of S.S. payments. People live longer and fewer children are being born. Let’s face it, the money I put into Social Security was never saved. The government imagined that we, the taxpayers, were required to pay tribute to the government and the government was obligated to receive it and spend it.
The retirement age was moved from 65 to 67 and may go up further to 75 or even 80. That simply means you have to live longer to begin collecting, and if you don’t make it to retirement age then the debt to you is forgiven. Score one for the government. What’s wrong with this scenario? Ask yourself to define a ponzi scheme and tell me if you feel like we are being conned into a false security because the checks keep arriving on time.
Now think about a recent shyster named Bernie Madoff who was creative enough to separate people from $65 billion of investment money. He’s in jail now because he didn’t have the broad powers of the Government to keep printing more currency and issue more bills and notes backed by the “Full Faith and Credit” of the U.S. Government. Bernie was dependent on new investors providing the money to pay off the older investors. But think what Bernie could do if Obama named him Secretary of the Treasury. He might still be in business. But, the truth is that Bernie is an amateur compared to the professionals that already work for the Government and they are the masters of deception. And they are not in jail even though they have stolen as much every day as Bernie did during his entire career.
As a matter of fact, the monthly interest payments on our national debt are twice as large as the total amount stolen by Bernie. And remember, those were the figures from January 2007. So, the debt has actually increased since 2007….with a greater percentage of increase coming since January 2009.
As I write this I realize that the current figures for the national debt are much higher than is being reported because the Social Security and Medicare debt has also increased in the last 2 ½ years. There is no way to pay it down as we have fewer people working to provide money to fund the monthly payments. Every month we go deeper in debt in Social Security and Medicare. The day will come when we will not have any money to pay those who depend on those income payments and the health care provided. We are a debtor nation and will continue to function as long as someone is willing to buy our debt.
When the “Full Faith and Credit of the U.S.A.” is no longer satisfactory to China, Japan and other Asian nations and Middle Eastern lenders, then what? Then we will be no better off than Bernie because the checks will stop and people will realize that the government was dependent on new money to pay off the current investors. When there is not enough new money the checks will stop. Remember the verse “Better a Lender than a Borrower Be?” It’s advice from the Bible and as usual, comes from wisdom beyond our own.
– Chuck Salisbury, TenPercentDown.com