USA has record $61.6 TRILLION in unfunded obligations; $534,000 per household

I don't see what the big deal is. Just print more dollah bills, playuhs.

Future generations will be screwed paying for this shit.

If the crunch holds off until "future generations" we will already be lucky. Anyone under 40 stands a real good chance of seeing the situation worsen very seriously during his working life, and even those of us who are close to what could be retirement age (if we were so inclined, which is not my case personally) have no guarantee that we won't see it ourselves.

Sooner or later, the "Free lunches for everyone, just write a check" mentality will produce consequences, and they will be the same for the nation as they are for an individual who takes that route. It merely takes longer coming, but the results will be on an incomparably more massive scale.

Yes, though I don't have the details.

Not to worry. Rick will be along momentarily to explain to us that this is nothing alarming.

I shall not. The US fiscal position is very challenging in the medium term.

Where I differ with you is how to deal with it, and I regard your "solutions" as tending to make things worse for people. And I also dispute those with a more paranoid mindset, who hold that a collapse is imminent.

Probably true. But then, I defy anyone to come up with any solutions that will not make things worse for people. The big question is: How long can we put it off? (Knowing that the longer we put it off, the worse will be the crash when it comes. In any case, we are way past the point of no return by now, which is why I claim there are no solutions that are not going to make things a lot worse for a lot of people.)

Honestly, I thought it was even worse than this.

A lot of this is subject to modification. It's only a liability if they intend to pay it. Raise the Social Security and Medicare ages, and trillions start coming off immediately. Ditto if you reduce benefits with means-testing.

The big numbers don't represent what we have to pay; they simply demonstrate the absurdity of the status quo -- how unsustainable it is, and the necessity of restructuring various benefits until they are sustainable. It's what we would have to pay to actually keep these programs solvent at current benefit levels. "Unfunded liabilities" is the total predicted shortfall of these programs.

Nobody's ever going to pay that money -- the question is how high the load will get before there's sufficient political will to reform the entitlements to a sustainable level.

I say we throw off the yoke today.

Worse than they need to be, I meant.
And by what measure has the "point of no return" been reached?

At this point, coming back to a level of public debt that is sustainable in the long term would require either raising taxes to a level that would crash the economy, cutting back public programs to a level that would cause massive public uprisings and thus crash the economy, or a combination of the two that would still crash the economy.

Which is why politicians of all stripes, in all major Western countries, just keep funding the debt and putting off the day when "we have to pay the piper". As long as it doesn't come on their watch, they consider themselves happy.

What would that be in 2011 dollars?

For the record, article was written in 1988.

The level of debt is not currently unsustainable. Do you mean deficit?

There are many major western countries that do not have problems of this nature.

I am aware that you believe the current level of debt is not a problem. I disagree with you.

That's because you don't believe high debt is a "problem". I disagree with you.

That it is sustainable doesn't imply that it is "not a problem". It would be better if it were lower.

If the budget were balanced tomorrow, thus eliminating the deficit, please explain why the debt itself would remain unsustainable.

1) All public spending (no matter how necessary or wisely done) is a drain on the economy, because the taxes that raise that money cause an imbalance in the natural price system--prices are somewhat higher than they would be if there were no taxes, and demand is thus somewhat lower. That means that people have less of a desired good or service than they would have if there were no taxes.

2) That drain is acceptable as long as what is furnished with that tax money contributes at least as much to the economy, in terms of the production of useful goods and services, as what is lost by raising it. That is why those who favour government spending always use the example of roads: That is an area where it is pretty clear that what is gained is at least as great as what is lost.

3) Paying the interest on the debt is requires taking in tax money to do it, but does not furnish useful goods or services. It is just money, and money is not, in itself, useful. In fact, one of the most fundamental problems with our current economic system is that it is based on finances (that is, money) rather than on true goods and services.

I read this far:

Point of order: Reagan DID try to abolish the Department of Education. He was overruled by the legislature. That was what was rolling in the back of my mind through the first part of the article: Reagan was dealing with a Tip O'Neil and a Democrat legislature. And unlike the current state of politics, Reagan knew how to compromise to get what he could.

Default is inevitable at this point. It's a matter of when, not if. Congress has shown us time and time and time again that they lack the sack to make the needed fixes.

The economic crash that follows the default is also inevitable, and will be world wide in scale thanks to the dollar being the world's reserve currency. Get used to the idea- we're experiencing a slow collapse as it is right now.

Well I'm doing my patriotic duty and sending in my $540,000 check.

Ummmm.......you might not want to actually cash that right away.
I'll just post-date it until next payday. I'm sure it'll be okay to cash it then.

I'm not seeing any reason here why the debt in itself is unsustainable, only why it is not ideal.

We can't be broke, we still have checks left!!!!

How about massive amounts of debt causes interest rates that eventually eat the holder alive if ignored or paid at minimum payments?

So... how's Australia doing economically?



Just curious.



And do you think they need any dentists?

First we need to set a max amount any person may draw from the government in any form. The double dipping with fed retirement and SS ends immediately. You want more money than the max amount then save or work and earn more money.

If they're all like Bailey, they hate Americans so you wouldn't be welcome anyway.

Disagree, and here is why:

everyone pays in to Social Security throughout their working lives. When they retire they should all get what's coming to them.
The Federal Employee gets their retirement because that was a benefit of their employment. Why should they have to give that up just because they are getting SS benefits that they paid for just like everyone else did?

Now that you mention it.


Crikey, Australia’s a Good Role Model

and therein lies the fatal mistake which will kill us all - you believe the lie.

what lie?

the lie that Social Security was "insurance" - something personal that you were buying for your future with the helpful assistance of government.

Bullshit.

Social Security was a pretty name designed to fool people into not realizing they were just paying another TAX.

In the same way that you pay taxes which fund, for instance, Food Stamps or Section 8 housing that you do not yourself ever use, even so "Social Security" was and is a TAX which carries with it no actual guarantee that you will ever get it back.

if it were anything else then your "account" would be part of your estate when you died - but it ain't, is it?

As long as people cling to the bullshit myth "I paid it in all my life and i damned well better get it back" we don't have a prayer of not going over the cliff.

Albeit, we'd have a very tiny chance of not doing so even if everyone woke up tomorrow.

^Death in Venice, here we come.

If you count unfunded obligations out to infinity in nominal dollars without defining "unfunded" and "obligations" we've always had infinite unfunded obligations. If you don't discuss timeframe, nominal vs. constant dollar status, and what specifically you mean by "unfunded" and "obligations" while discussing the extent of currently existing unfunded obligations, you're discussing the effect of neeger jeeger fart fart on cows orbiting the seventh planet of the Farfenarg system.

Which is actually a very serious problem, as this report shows:

http://neeger_jeeger_fart_fart/orbit/cows/farfenarg.com

But we probably shouldn't mention that to Congress; they will set up a multi-million-dollar investigation and probably award several billion more in subsidies, just in case, and to help stimulate the economy...