USA TODAY has just reported information many of us have known for some time; the U.S. is spending itself into its own version of a bankrupt Greece. The problem is, unlike Greece, the whole free world depends on us and the sanctity of our dollar and its convertibility.
The USA Today report says, in part: "The (federal) debt only tells us what the government owes to the public. It doesn't take into account what's owed to seniors,veterans and retired employees," according toaccountant Sheila Weinberg, founder of the Institute for Truth in Accounting, a group that advocates better financial reporting. "Without accurate accounting, wecan't make good decisions."
The report goes on: The federal government financial condition worsened drastically last year, beyond the $1.5 trillion in new debt taken on to meet the budget deficit. There was $5.3 trillion in new obligations in 2010, for Medicare and Social Security. That added a $61.6 trillion to the total of Uncle Sam’s financial IOUs.
The deficit between spending commitments and revenues last year now equals more than one-third of the America’s gross domestic product.
Corporations would be required to count these new liabilities when they are taken on, borrowed for everything else.
Liberals and members of the Obama administrations still insist that future growth will cover this gap. But we are talking about years and years of at least 5% to 7% annual GDP growth. This is unlikely when there is nothing in the future to entice a vibrant economy but job-defeating inflation, higher interest rates that accompany inflation and the specter of higher taxes and regulation from the left.
No comments:
Post a Comment