You're in Debt and You Don't Know It.

[QUINNSCOMMENTARY]

If the US Federal Government were a business, no one would invest, if it were a person it would be headed to bankruptcy court, but it is neither of those so our politicians are free to play with trillions of dollars creating liabilities for decades to come. It’s kind of like promising your ten year old daughter that you will pay the full cost of college for her granddaughter, even Harvard. Quite a promise and perhaps well meaning, but you have no idea what the true cost will be, how you will fund it or even if you will be around to meet the commitment. Hey, you are a politician and didn’t even know it. :wah:

According the most recent reports, the US National Debt is $9.5 trillion, not counting the accrued unfunded liabilities for Social Security, Medicare and Medicaid. Think of those items as your employer’s pension promise, but no money is put into a fund so your pension security is based on your employer staying in business and meeting that commitment to pay you a pension starting 30 years from now and paid to you for another 20 years after you retire. Sounds like a good deal, right? :rolleyes:

Exactly who does the federal government owe the debt to? Well, if you buy US Savings Bonds, it owes some of it to you, so no big deal. Eh, not exactly.

The Federal Reserve holds at least $515 billion of the national debt. It’s all rather complicated and I suspect the politicians like it that way, but on the other hand, they don’t understand it all that well either and hence they create more and more debt and liabilities that the next generation will have to pay for, but those promises make us all feel good for the moment. Think Medicare Part D, we sure solved the prescription drug problem for seniors.



Read this from Wikipedia:

A traditional defense of the national debt is that we "owe the debt to ourselves", but that is increasingly not true. The US debt in the hands of foreign governments is 25% of the total[33], virtually double the 1988 figure of 13%.[34] Despite the declining willingness of foreign investors to continue investing in dollar denominated instruments as the US Dollar has fallen in 2007,[35] the U.S. Treasury statistics indicate that, at the end of 2006, foreigners held 44% of federal debt held by the public.[36] About 66% of that 44% was held by the central banks of other countries, in particular the central banks of Japan and China. In total, lenders from Japan and China held 47% of the foreign-owned debt.[37] Some argue this exposes the United States to potential financial or political risk that either banks will stop buying Treasury securities or start selling them heavily. In fact, the debt held by Japan reached a maximum in August of 2004 and has fallen nearly 3% since then.[38]

http://en.wikipedia.org/wiki/United_States_public_debt

Not only do we buy everything from China, we owe China a hefty sum as well. So, we have the “greatest country on earth” with its hand out begging for money from individuals and governments around the world and increasingly those investors are saying no thank you. Then what, oh, I have it, just increase the amount you invest in Savings Bonds each week from your pay check. You do buy bonds don’t you? :yh_worshp

There are those who say the debt is no big deal and we have worked our way out from under before, like after WWII. That’s true, but the greatest generation is moving on and the Americans of today don’t think the same way. The greatest generation paid cash for most of what they bought too, they remembered the Great Depression, and today the depression is probably not even in history books in our schools.

So, here is the deal if you are under 60, be afraid, be very afraid and think to yourself, how are they going to pay off that debt and keep spending like drunken sailors? How is the next president going to accomplish all that he is promising me today? How silly of me, the politicians will simply raise taxes on those billionaire hedge fund managers, all ten of them, and the rest of us can go merrily on our way. :guitarist

[QUINNSCOMMENTARY]

rjwould;870302 wrote: So what do you propose as a solution?


Well, let's see, first a little truth to the American people on what it takes to fix this mess. Perhaps less demand for programs and services we cannot afford, but wait we may have that one nailed as Barack says he will not be influenced by special interests.

Fix Social Security, one simple fix is merely to adjust the inflation factor to something closer to what impacts people over 65. Also, bring the benefits more in line with the 21st century instead of 1935.

Really eliminate pork barrel spending (admittedly a very small part of the overall problem).

Fix the Fedral budget process so nothing is used as revenue that is not and all spending is counted which is not the fact now.

Use experts in the affected areas to truly estimate the cost and long term liabilities created by new programs and changes to existing ones. In other words, dare I say accountablity.

And sadly, since none of that is going to happen, tell people that taxes are forever going up and while politicians like to attack the wealthy, tell Americans that higher takes on the top 1% ain't going to do it and that all forms of hidden taxes will also be applied to the vast majority of middle class Americans as well.

You get what you pay for and now it is time to pay for what you get (or what somebody else gets as the case may be). :-5

Of course, we could all just go out and buy lots of U.S. Savings bonds which if you use I bonds is not a bad deal. :rolleyes::rolleyes::rolleyes: