news.com: US Government 'hiding true amount of debt'

[Thiebear]

THE actual figure of the US' national debt is much higher than the official sum of $US13.4 trillion ($14.3 trillion) given by the Congressional Budget Office, according to analysts cited on Sunday by the New York Post.

"The Government is lying about the amount of debt. It is engaging in Enron accounting," said Laurence Kotlikoff, an economist at Boston University and co-author of The Coming Generational Storm: What You Need to Know about America's Economic Future.

"The problem is we're seeing an explosion in spending," added Andrew Moylan, director of government affairs for the National Taxpayers Union.

In 1980, the debt - the accumulated red ink incurred by the Federal Government - was $US909 billion.

This represented some 33 per cent of gross domestic product, according to the Congressional Budget Office (CBO).

The CBO estimates the debt will be at $US16.5 trillion in two years, or 100.6 per cent of GDP.

But these numbers are incomplete.

They do not count off-budget obligations such as required spending for Social Security and Medicare, whose programs represent a balloon payment for the Government as more Americans retire and collect benefits.

In the case of Social Security, beginning in 2016, the US Government will be paying out more than it is collecting in taxes.

Without basic measures - such as payment cuts or higher payroll taxes - the system could be on the road to bankruptcy, according to officials.

"Without changes," wrote Social Security Commissioner Michael Astrue, "by 2037 the Social Security Trust Fund will be exhausted. There will be enough money only to pay about $US0.76 for each dollar of benefits."

Mr Kotlikoff and Mr Moylan agree US national debt is much more than the official $US13.4 trillion number, but they disagree over how to add up the exact number.

Mr Kotlikoff says the debt is actually $US200 trillion.

Mr Moylan says the number is likely about $US60 trillion.

That is close to the figure quoted by David Walker, the US Comptroller General from 1998 to 2008.

He launched a campaign to convince Americans that the federal spending and debt is a greater threat than terrorism.

But whichever figure is accurate, all three agree that the problem has worsened in the last few years.

They say it is because Congress and the Administration, whether Republican or Democrat, consistently overspend.

Read more: http://www.news.com.au/business/breaking-news/us-government-hiding-true-amount-of-debt/story-e6frfkur-1225926567256#ixzz10GI7ssYI

Key points:

Mr Kotlikoff and Mr Moylan agree US national debt is much more than the official $US13.4 trillion number, but they disagree over how to add up the exact number.

Mr Kotlikoff says the debt is actually $US200 trillion.

Mr Moylan says the number is likely about $US60 trillion.

I've been saying for years reading about Social Security and the Baby Boomers coming.

This recession (extended 1.5 years longer than experts say due to payments based of jobs) is killing us.

What was 2020 became 2016 is becoming 2012.

Without tackling SS and Medicaid right this very second we are going to look back to fix it.

AND: Congress is going to take 3 weeks off early this year to campaign. Work 3 days in October, Work 3 days in Nov and maybe 3 days in December. Today is basically 2011 in Congress. Then we are going to spend 2 months re-organizing the leadership. (not very good timing).

[Homercles82]

Spending problems opn boths ides of the aisle have created this leviathan. Wasn't there a study recently that said 50% of Americans are receiving some form of government assistance?

“When the people find they can vote themselves money, that will herald the end of the republic.” - Ben Franklin

[Fergasun]

No, they are wrong. Our real national debt is the $13T number.

We don't really have to pay social security and medicare. So they aren't really part of our "debt".

I'm sorry but that's the truth. If the people who are benefitting from these programs don't realize this and push us further and further into paying them 100%, they will eventually reap what they are sowing.

Treasury bills actually do have to be paid back. The other programs are moe like "soft promises".

[Da'uud]

Does this mean we should move to another country?

[Ellis]

"..it's like saying if the world became too populated, there wouldn't be enough gravity to hold people on here."

Rebuttal to Kotlikoff from August.

c0YqCFIsxs8

[gbear]

The problem is one of power. If as the news peace says our real export is our currency (and in my eyes our market place), have we not left our future in the hands of a bunch of outsiders.

How long can we survive once other countries ask what backs our dollar? Right now the answer is every other country's desire to preserve the value of their savings. What happens when a few countries start diversifying? Right now, that seems silly as other economies are hurting even worse than ours...but all it takes is a few to start doing what most of us do with stocks. Gee, the S&P 500 has done pretty well for me, but I think I'll put 15% in a small cap index. That's followed by 10 years down the line the newcomers are given the following advice "If you have 30 years before you are going to retire, put most of your money in the small caps." If the S&P were deriving all of its worth from being the index of choice, then it's shot.

I think that is the worry behind following what the guy in the video suggests.

[Ellis]

that's not even close to what M. Norman said.

America is an ISSUER of currency. We do not borrow it. We create it.

How can the creator of money go bankrupt?

Debt, no matter how large, is not the issue. The biggest threat to the future of America can be summed up in a question... Are there going to be enough people working? The working people use the currency. If there are not enough people using the currency, thus feeding our economy, then how do we survive as a nation?