Wednesday, September 21, 2011

America's Debt Woe is Worse Than Greece's

You've heard for months from The Doc that the US is Greece X 100.
Now even CNN is admitting that the US' total debt exceeds $200 Trillion.
$211 Trillion is roughly 15 X US GDP. 
To put this number in perspective, multiply your salary from last year times 15.  This is your individual share of US debt.

America’s debt woe is worse than Greece’s By Laurence J. Kotlikoff, Special to CNN
Boston, Massachussetts (CNN) — Our government is utterly broke. There are signs everywhere one looks. Social Security can no longer afford to send us our annual benefit statements. The House can no longer afford its congressional pages. The Pentagon can no longer afford the pension and health care benefits of retired service members. NASA is no longer planning a manned mission to Mars.
We’re broke for a reason. We’ve spent six decades accumulating a huge official debt (U.S. Treasury bills and bonds) and vastly larger unofficial debts to pay for Social Security, Medicare, and Medicaid benefits to today’s and tomorrow’s 100 million-plus retirees.
The government’s total indebtedness — its fiscal gap — now stands at $211 trillion, by my arithmetic.

The fiscal gap is the difference, measured in present value, between all projected future spending obligations — including our huge defense expenditures and massive entitlement programs, as well as making interest and principal payments on the official debt — and all projected future taxes.
The data underlying this figure come straight from the horse’s mouth — the Congressional Budget Office. The CBO’s June 22 Alternative Fiscal Scenario presents nothing less than a Greek tragedy. It’s actually worse than the Greek tragedy now playing in Athens. Our fiscal gap is 14 times our GDP. Greece’s fiscal gap is 12 times its GDP, according to Professor Bernd Raffelhüschen of the University of Freiburg.
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