The bills are coming due, and our creditors will demand cash.
Forget “fiscal cliffs” – this one and the other ones sure to come. Yes, the arbitrary tax increases and spending cuts created by Congress as a self-imposed deadline will cause hardships, even a likely return to recession. But that pain is relatively minor compared with the avalanche of “trillions of dollars of debt that’s headed our way, gathering speed and mass.” From the end of World War II to now, we went from being the world’s largest creditor nation to being the largest debtor, “with roughly half our public debt held by foreign leaders.”
That warning is from Mort Zuckerman in U.S. News & World Report, who says our day of reckoning cannot be avoided. “The liabilities are so huge, and multiplying so fast, that there will be one unavoidable demand as the various bills come to their due date. Show us the money!”
Just consider the awful, scary facts:
Over the last four years, the national debt has grown by more than $5 trillion to $16 trillion. The interest alone on that debt for 2012: nearly $360 billion.
And that’s just the tip of the iceberg. The unfunded commitments for Medicare, Social Security and the future retirement benefits of federal employees total more than $87 trillion, or 550 percent of GDP. That makes the debt per household more than 10 times the median family income.
The federal budget and “fiscal cliff” debates focus only on yearly deficits and the accumulated debt, not on unfunded liabilities. And since 100 percent of money from payroll taxes for Medicare and Social Security is spent the same year it comes in, no money is available to pay ahead. The annual accrued expenses for those two programs now stand at $7 trillion.
Today less than 40 percent of the budget is decided by Congress and the president rather than being obligated for existing programs, down from 62 percent 40 years ago.
The debates over taxing and spending these days do nothing about any of that. All our leaders are talking about is how much to keep growing the spending.
It’s as if they’ve been dumping water by the bucketsful into our basement, watching as it starts to creep up to the first floor. Even if they were talking about taking out a spoonful or two, that would be meaningless. All they’re really debating is whether to keep adding water by the pint or by the quart.
And we can’t really blame them. They’re only bowing to our wishes to keep getting more from government than government can pay for. Alas, we’re likely to keep demanding that until the avalanche buries us.