Is the USA bankrupt? (I mean in terms of $$)

by Abaddon 14 Replies latest social current

• 

  Abaddon

  More fun links from http://www.informationclearinghouse.info/index.html

  "... past and current generations of Social Security recipients will receive $8.7 trillion more in benefits than they will pay in employment taxes. Our children and grandchildren will pay $1.7 trillion more in employment taxes than they will receive in benefits."

  "... national debt in 2003 was about $3.8 trillion in the form of government 'debt held by the public.' But that number ignores massive imbalances in Medicare and Social Security programs and the government's other programs."

  "When the liabilities associated with those programs are taken into account, the nation's fiscal policy is currently off-balance by over $43.4 trillion in present value, a number that is not reported in standard budget documents,"

  "... $43 trillion in the hole. (The Federal Reserve, by the way, recently put the net worth of all households at $39 trillion. This problem goes way beyond whether to tax the rich, the poor or the middle-income.)"
• 

  Realist

  hello abbadon,

  i think this issue was briefly discussed in another thread already.

  as far as i understand it the 43 trillion are not current debts but would accumulate if the US gov. would not increase taxes or reduce spendings to account for the developing inbalance of the social systems.

  like in several european countries (germany, france, austria etc.) reductions in social security will be necessary repsectively increased taxes.

  most western countries have about the same level of debts (around 60% of the GNP). it would be amazing if the US had 10 times as much as all other countries.
• 

  Gopher

  I am an American wage-earner who is not planning on Social Security funds to be there when I retire sometime between 2025 and 2030. I believe I have to set aside a fraction of my present income into growth funds to have something to draw from at that future date.

  If I am able to derive SOME income from Social Security, I'll consider that to be a bonus.
• 

  Amazing

  HI Abadon: The total debt load you speak of has been well documented for decades. It has grown since I last looked at the reports where it was a mere 20 Trillion many years ago.

  It is called the "Off Book Debt" which accounts for ALL "Potential" debt that is currently performing as agreed, such as FHA loan guarantees where FHA home loan borrowers are paying their mortgages ... and ... if they defaulted, the FHA would have to make good on its mortgage insurance by tapping into the mortgage insurance premium funds. This debt, however, is not serviced and does not require government to raise taxes or pay anything from the general fund.

  Another example is that of bonds which is long term debt that the government does not pay until the bonds are redeemed, which is normally done at a slow rate in the first half of the bond life.

  The US government also makes many other non-residential loan guarantees both in commercial, as well as to foreign governments.

  Gopher is very correct about the non-reliance on Social Security among Americans. Likewise I and most others I know do not count on Soc Sec to be there when we retire.

  The US government is not bankrupt, but its Social Security program is in serious trouble for one major simple reason: Our Congress borrowed from it for decades and merely declared it solvent by providing vouchers (promises to pay it back) ... and they have stolen over a Trillion from the fund. The original concept was that the fund would be separated from the general fund and would be invested to grow with normal interest ... it was promised to never fail ... but once the government started using the money, they transferred it to the general fund and it was gone a long time ago.

  Various Presidents (mostly Republican) have sought to increase the Fica tax, raise the retirement age, and limit benefits in an effort to help cure this problem. The Democrats have continued to exapnd the SSI programs so that more is spent everytime the Fica tax goes up. Soc Sec cost used to be about 1% to 2%, but now is over 7% to employees, and 15.4% to the self employed.

  Our nation is not currently bankrupt, nor is it likely to be in the near future ... but if it does not square away some of its obligations, and get Social Security invested to grow, as George Bush wants to do, then we will be bankrupt and have no Soc Sec ... and someday we will need to give 100% of our money to the government just to pay taxes. - Jim W.
• 

  Jesika

  My roommate was watching over my head and saw the "title", his responce was...................

  "We have printing presses, we can print as much $ as we want"

  LOLOLOLOLOLOLOLOLOLOLOL (can anyone else say hyper inflation?? LOL)

  I am making light of a serious matter, sorry, but when my roommate said that, I HAD to post it!!! LOL

  Jes
• 

  JT

  My roommate was watching over my head and saw the "title", his responce was...................

  "We have printing presses, we can print as much $ as we want"

  LOLOLOLOLOLOLOLOLOLOLOL (can anyone else say hyper inflation?? LOL

  yep let the presses run and that is what they do- years ago the USA went off the Gold standard where for every dollar is was backed up by GOLD- well since they went off the gold standard if the debt was to be called in the USA could not cover it,but then again if the USA falls- i really don't see how any other nation is going to make it, the same can be said of most of the nations of europe, esp since all the western countries and many asian countries are tied together at the hip

  to have the US default would lead to total banking failure in my view-

  but as they say the US doesn't need Gold- since the accounts are backed up by the GOOD FAITH OF THE US GOV- for whatever that is worth-
• 

  drwtsn32

  I mean in terms of $$

  Oh, I'm glad you didn't mean morally bankrupt because obviously that isn't true!
• 

  Realist

  drwtsn,

  LOL that was great!!!!!!!!!!!!!!!!!!!!!!!!!!!!
• 

  teenyuck

  Read Amazing's reply. It sums it up pretty well. If you are not from the US and don't have intimate knowledge of the Social Security system you need to do more research.

  The Social Security fund has been raided for decades to fund all kinds of social programs. Not what it was intended for. Now, when I retire, I can expect zero of the thousands of dollars I have put in.

  The US government is not bankrupt, but its Social Security program is in serious trouble for one major simple reason: Our Congress borrowed from it for decades and merely declared it solvent by providing vouchers (promises to pay it back) ... and they have stolen over a Trillion from the fund. The original concept was that the fund would be separated from the general fund and would be invested to grow with normal interest ... it was promised to never fail ... but once the government started using the money, they transferred it to the general fund and it was gone a long time ago.

  Various Presidents (mostly Republican) have sought to increase the Fica tax, raise the retirement age, and limit benefits in an effort to help cure this problem. The Democrats have continued to exapnd the SSI programs so that more is spent everytime the Fica tax goes up. Soc Sec cost used to be about 1% to 2%, but now is over 7% to employees, and 15.4% to the self employed.

  Tina of the *Morally Bankrupt American* Class

  Some of you are really becoming self-righteous SOBs
• 

  MrMoe

  And debating this topic helps me in what way? What is up with the debate on the US anyhow? It gets so boring to hear constant dribble about your country, both positive and negative, although it seems that the negative is what makes things exciting.

  I love America because I love the citizens, but in some aspects dislike it for the government that runs us all (insert Bush hatred comments here.)