Originally published September 8 2011
You think we owe $14.5 trillion? The real figure is more like $211 trillion
by J. D. Heyes
(NaturalNews) Remember the tussle between Congress and the White House earlier this summer over raising the nation's debt limit? Supporters of the "deal," including President Barack Obama, tried to assuage our angst over the incredible amount of money - $14.5 trillion - our nation owes by saying, in essence, don't worry, we can handle a debt that's the size of our entire annual gross domestic product.
Only, the real amount of money our government owes - roughly $211 trillion, according to a top economics professor - is several times the size of our economy today and in the future.
Laurence J. Kotlikoff, who served as a senior economist on President Reagan's Council of Economic Advisers, said in a recent interview with National Public Radio that the debt-ceiling agreement, which was supposed to include "budget cuts" but which contained no real spending reductions at all, was an exercise in futility.
"We have all these unofficial debts that are massive compared to the official debt," Kotlikoff said, noting that the $14-odd trillion dollar figure is just the tip of the economic avalanche set to sweep across our nation. "We're focused just on the official debt, so we're trying to balance the wrong books."
When you add up all of the unfunded liabilities, years worth of over promising made by generations of pandering politicians, the real debt is impossibly crippling.
"If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That's the fiscal gap. That's our true indebtedness," he said.
Is this figure a big secret in Washington? Do our leaders simply not understand the gravity of the situation? Or, more likely, are they content with sweeping it under the rug now, so the next generation has to deal with it? Kotlikoff said lawmakers choose their language carefully when discussing the national debt so as to divert our attention away from the severity of the problem.
"Why are these guys thinking about balancing the budget? They should try and think about our long-term fiscal problems," he said.
One of the biggest problems the nation will face in the short-term is finding a way to pay out Social Security benefits to tens of millions of retiring seniors. Just doing the math is mind-boggling.
"We've got 78 million baby boomers who are poised to collect, in about 15 to 20 years, about $40,000 per person. Multiply 78 million by $40,000 -- you're talking about more than $3 trillion a year just to give to a portion of the population," he said.
"That's an enormous bill that's overhanging our heads, and Congress isn't focused on it. We've consistently done too little too late, looked too short-term, said the future would take care of itself, we'll deal with that tomorrow," said the economics prof.
The fix isn't easy and in fact, in today's America, it's probably not even feasible. Substantial changes must be made to entitlements, and that would mean dramatic spending cuts and tax increases on a scale not even being talked about - at least publicly.
So, with no way to fix the problem, do you think it's going to get better, get worse or simply go away?
"What you have to do is either immediately and permanently raise taxes by about two-thirds, or immediately and permanently cut every dollar of spending by 40 percent forever. The [Congressional Budget Office's] numbers say we have an absolutely enormous problem facing us," says Kotlikoff.
Who in Washington or among the general population would support these dramatic steps? There's your answer.
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