The United States government will never have another balanced budget again. Yes, you read that correctly. U.S. government finances have now reached a critical "tipping point" and things are going to spin wildly out of control from this time forward. Why? Spending on entitlement programs and interest on the national debt are now accelerating at exponential rates. Some time around 2020 they will eat up every single dollar of federal revenue that is brought in before a penny is spent on anything else. Of course the solution to all of this would be to radically cut entitlement programs, but no U.S. politician in his or her right mind would do that. After all, do you think elderly people (who vote in droves by the way) would vote for you after you just cut their Social Security checks in half? That is not the way the world works. You see, democracies always get into trouble once the people realize that they can vote for the candidates that promise them the largest gifts out of the public treasury. That is where the United States is at now. Over 100 million Americans now receive direct payments from the United States government. For millions of Americans, the American Dream now means getting a government check and kicking back and enjoying life. We have become a nation that is chock full of people that can't take care of themselves and that are totally dependent on the monolithic nanny state that the U.S. government has created.
Now, the truth is that helping the poor and those who cannot help themselves is always a good thing.
Nobody is denying that.
But are there really 100 million Americans that cannot take care of themselves?
Of course not.
The welfare state has gotten wildly out of control and now we are drowning in an ocean of red ink because of it.
In fact, unless the underlying laws for the entitlement programs are rewritten and unless benefits are cut to the bone, it will be mathematically impossible for the U.S. government to balance the federal budget from this time forward.
You are skeptical of that claim?
The following are 14 reasons why the U.S. government will never have a balanced budget ever again....
#1) Right now, interest on the U.S. national debt and spending on entitlement programs like Social Security and Medicare are somewhere in the neighborhood of 10 to 15 percent of GDP. By 2080, they are projected to eat up approximately 50 percent of GDP.
#2) Approximately 57 percent of Barack Obama's 3.8 trillion dollar budget for 2011 consists of direct payments to individual Americans or is money that is spent on their behalf.
#3) Nearly 51 million Americans received $672 billion in Social Security benefits in 2009. That number is projected to grow substantially in years ahead as waves of Baby Boomers begin to retire.
#4) According to the Congressional Budget Office, in 2010 the Social Security system will pay out more in benefits than it receives in payroll taxes. That was not supposed to happen until at least 2016.
#5) Back in 1950 each retiree's Social Security benefit was paid for by 16 workers. Today, each retiree's Social Security benefit is paid for by approximately 3.3 workers. By 2025 it is projected that there will be approximately two workers for each retiree.
#6) The U.S. government "borrowed" 2.5 trillion dollars from the Social Security Trust Fund, and now it turns out that the Social Security system is going to start needing that money. So where will the U.S. government get an extra 2.5 trillion dollars?
#7) Over 40 million Americans are now on food stamps and the U.S. Department of Agriculture is projecting that more than 43 million Americans will be on food stamps by the end of 2011.
#8) Entitlement programs are not subject to budget freezes or budget cuts - unless Congress changes the underlying laws.
#9) The lobbies for those receiving entitlement payments are extremely powerful. That is why so few politicians will ever even mention the possibility of cutting Social Security payments. Old people vote in high numbers, and cutting their benefits would really piss them off.
#10) Interest on the U.S. national debt now makes up 7% of the budget and it is climbing rapidly. This is an expense that must be paid or else U.S. government finances collapse.
#11) According to the Tax Foundation’s Microsimulation Model, to erase the U.S. budget deficit for 2010, the U.S. Congress would have to multiply the tax rate for every American by 2.4. That would mean that the 10 percent tax rate would become 24 percent, the 15 percent tax rate would become 36 percent, and the 35 percent tax rate would have to be 85 percent. Keep in mind that this is before unemployment taxes, Social Security taxes and state taxes are paid. Do you think any American would ever put up with a federal income tax rate of 85 percent?
#12) According to an official U.S. government report, rapidly growing interest costs on the U.S. national debt together with spending on major entitlement programs such as Social Security and Medicare will absorb approximately 92 cents of every dollar of federal revenue by the year 2019. That is before one penny is spent on anything else. As the U.S. government graph below reveals, the financial picture only gets more bleak in the years beyond that....
#13) The present value of projected scheduled benefits exceeds earmarked revenues for entitlement programs such as Social Security and Medicare by about 46 trillion dollars over the next 75 years. So that means that the U.S government is going to have to find an extra 46 trillion dollars from somewhere to pay all those benefits.
#14) The vast majority of the American people have become soft and don't know how to take care of themselves any longer. We now have millions upon millions of people who are totally dependent on the U.S. government for survival. As the government takes care of more and more people the red ink will increasingly get worse. At what point will it cause U.S. government finances to totally collapse?
Needless to say, the U.S. government is facing a financial crisis that is absolutely unprecedented in U.S. history. There is no way out of this mess that does not involve a massive amount of economic pain.
As of June 1st, the U.S. National Debt was $13,050,826,460,886.97. But as you can see from the data above, things are about to get a lot worse.
We are heading into a financial black hole that will literally rip apart this nation if something is not done right now to fix things. But the folks down in Washington D.C. don't seem the least bit interested in fixing things. In fact, about the only thing they seem determined to do is to spend even more money and get us into even more debt.
The course we are on now can only end badly. Hopefully our representatives in Washington D.C. will wake up while there is still time. If not, the tsunami of red ink that is headed our way will devastate all of our lives.
This isn’t about raising taxes anymore–it is about cutting out the ridiculously high entitlements to public workers through their unions. These pensions and benefits ARE the main reason for fiscal problems ahead, for both the US Govt and the states. Greedy, corrupt unions and their lobbyists have gone too far, with many $100k + annual pensions for teachers and police who in reality don’t deserve it !!
Gary – you’re an idiot. Even if 100% of the income of the wealthiest Americans was taken away in a flash – it would only barely cover the first $1 Trillion of the current budget.
KZ
You’ve got thing mixed to gether. Teachers and Police etc. are covered by the State and Local pension system, and have noting to do with the Federal deficit.
The cost of Federal Pensions, including military pensions, is very small compared to the rest of the Federal Spending, practically a drop in the bucket. Both Military and over 75% of Civilian Federal employees are covered and pay into Social Security. That’s supposed to cover about 1/3 of thier reitrment. Civilians ahve been paying into a Trust Fund, kind of like the Social Security Fund, especially, since that money has also been borrowed for other things. They are kind of in the same boat as the rest of the US.
“You’ve got thing mixed to gether. Teachers and Police etc. are covered by the State and Local pension system, and have noting to do with the Federal deficit. ”
Not at all : The deficit in the pensions, brought on by inadequit funding, poor investment choices, and “borrowing” from the pools has created a tremendous overall lack of money–which will have to be made up by the US Govt and states if they choose to go ahead with this. This becomes a major expense to the taxpayers. Just turn to Calpers, New York, and New Jersey for examples.
I strongly object to the word ENTITLEMENT when applied to Social Security. By law, I must pay into
Social Security run by the government. Money that could have been applied in the private sector (401K, IRA, etc.) that no one could have “borrowed.” It could have easily been a law, should the government really have my interest at heart, that i do just that. Then no one would be saying that, in my golden years, I am expecting an “entitelment” from the government. Money that I earned is not an entitlement.
To Gary:
What will happen if you increase taxes for ONLY the wealthest:
1.) They will hire the best lawyers to avoid paying taxes at all cost. Or maybe something like Warren Buffet, he has something like $9 billion in carry forward charitable contributions, and will be donating everything to charity upon his death. Government reciepts from him = $0. But how can you hate someone that is giving away his entire net worth to a charity that’s mission is to help the greatest amount of people with the least amount of money. Or as I like to think of it, help the people that really need help, not the lazy.
2.) Businesses will be hurt, less jobs, markets decline, 401k’s and retirement accounts of middle class get hit hard. To further let you understand, the funds of people in the wealthest 5%, tends to be investment. A lot of it is invested in the country, whether it be for new businesses, exsisting business, fund government debt, etc, but it provides capital that grows GDP, helps the government run, starts and maintains Businesses, creates jobs, keeps markets rising, keeps currency strong, etc. (I could go on and on and on).
3.) The wealthest become Ex-Patriots, or go live in other countries where they aren’t punished for working hard, innovation, and risk taking.
4.) The incentive to work hard and strive for excellence goes down, so the attitudes and actions of citizens could ruin the country (I hear a little voice saying “Subprime Debt and MBS’s” in the background)
5.) The entire foundation for a Democracy is gone.
Gary, you would love what is called a socialist society. Unfortunately their has never been one that has survived in the history of the world.
You have it right with one exception – social security should not be lumped in with entitlement programs such as welfare. Social security is supposed to be 100% funded by the future recipient whereas welfare recipients might never have paid a penny in taxes. That our greedy and corrupt “leaders” have stolen the money from the social security “fund” has certainly created an enormous financial problem, but anyone who has paid into social security for their working lives (by force I might add, it isn’t as if we have a choice) deserves to receive the paltry retirement benefits. One excellent suggestion I’ve read about – fedgov could sell off the land it owns to refund the social security fund, and perhaps even get solvent again.
My earlier request was if you can enlighten us about some of the costs the US incurred from the wars waged, for instance Vietnam and the consequence of pegging off the dollar from the gold by Richard Nixon.
We have people in left-of-centre just as well extreme right etc and it is this group of people we must value, I suppose if, all the others must survive because they work their arses out physically for the big ideas bosses in airconditioned offices.
The US and allies could save the world not with amunition but with respect and understanding. Well, destroy thereby creat a market in re-building isnt it?
I believe in hard work and so is the rights of the retired to benefit.
Kind Regards
Hassan
For Greg: You are so right about your politics and your Christian
beliefs, and stating what the Bible says about the end times in
Revelation. One man said Jesus was a Socialist. Yes, he fed the poor and anyone else who needed help, but he did it voluntarily,
as our Christian Saviour,not because some Govt. forced him to do it. We certainly have created an “entitlement society” and we’re
paying dearly for it.
Wow, just wow. I’m glad lazy people like Gary think they’re self-entitled to my hard earned money. They can collect unemployment, I cannot. I don’t pay into Social Security but will get little to nothing out (according to Social Security) and all because I learned a trade and became self-employed (hire help when I need muscle basis but nothing near full-time, I don’t want the added tax and paperwork burden).
I work a 12 hour day normally (with paperwork thrown in maybe even longer) and regularly hit 16 hour days. I work some hours on the weekend too doing paperwork/billing. Gary believes he should get a larger part of MY hard earned money for doing less. Or thinks he should get paid equally. I’m sorry, move to England, France or Spain. Since their economies are pretty much toast in the very near future good luck. “Socialism works as long as someone else is willing to pay for it.” <– Famous quote, find the source.
This country was founded on the belief of small government (I'm not a Republican, both parties are equally as useless, both spend beyond their means) and people taking care of THEMSELVES. A government does not have the ability to do ANYTHING efficiently or effectively. It could all be done for cheaper privately. No pensions to fund, no benefits to pay out (that is put onto the company doing the work to do or not do) and to pay a fair market value to its employees for the work done. The government does a horrid job at distributing wealth, a lot of waste, corruption, etc.
Soon the minimum wage will be lowered so we can finally compete with China (or it will go up as our dollars become worthless and inflation spirals out of control). Heck, we might even start MAKING things again. Sorry but being a customer service country produces nothing.
I have a motto I live by (btw I'm from Canada, I left a socialist country for a reason and didn't plan on moving to a new one!) that, "if government is the answer, it was a stupid question."
Don't expect government to solve your problems, if you do, get out of the country you're a drain on society. Thanks, sincerely those that pay your lazy way.
KZ, I am a retired elementary teacher from MD that gets $791 a month pension after teaching 26 years full time and 6 years (while raising my son) part time in the system. That is hardly the $100K plus that you purport. I got to my classroom at 7:30 each morning and left at 4:30 each evening only to get home, cook supper for family, help our son with his homework, and grade papers and plan for the next day–no time for TV, reading etc. during the school year. In addition, I spent approximately $500 each school year of my own money on classroom materials including, but not exclusivley, notebooks, pencils,gluesticks, colored pencils, etc. for my students whose parents did not send them to school with the needed supplies. And my experience is not atypical.