The Real Federal Debt Burden

We have realized 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 had a report saying, 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 to accountant Sheila Weinberg, founder of the Institute for Truth in Accounting, a group that advocates better financial reporting. "Without accurate accounting, we

can't make good decisions."

The federal government financial condition has worsened drastically, beyond the well over $1.5 trillion in new debt taken on to meet the budget deficit of recent years.

The deficit between spending commitments and revenues now equals more than one-third of the America’s gross domestic product.

Corporations would be required to count these new liabilities, real or implied, when they are taken on.

Liberals and members of the administrations still insist that future growth will cover this gap. But we are talking about years and years of at least 5% 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 higher taxes and regulations.  (See the Earl J. Weinreb NewsHole® comments and @BusinessNewHole tweets.)