According to this, the US is broke...

[Crown]

Durran Korr sorry for the bold, it's just a general reply so I didn't know what to quote.

Okay first the EU econonmy (of which a large percentage is spent on farming) is smaller than 1/10 th of the US federal economy. While yours is about 10 trillion and all of the EU members (15) added up is about 9 trillion, the EU (quasi-federal or confederacy) has a budget of less than a trillion.

Farm subsidees are gonna get re-vamped in 2007 and possibly eliminated entirely by 2013.

And yes while Germany is on the brink of recession (it is probably there, but it did have it's first positive growth last quater after 3 or 4 consecutive retractions), other economy's are growing. The expansion is both a blessing and a curse, it's a curse for the fact that when the new members adopt the Euro their potential for growth will be stunted (because of the Euro's extraordinary strenght at the moment), but a blessing because either way investment will move in there.

By 2007 Greece, Portugal and possibly Ireland and Spain will also be net-contributors to the EU budget (all small fry except for Spain I grant). So the EU or more specifically the 'Euro' economies will converge.

Having said that, you will not now or ever be a third world country if your economy melts down. Everyone else has listed the appropriate responces (your strong infrastructure and know-how) but here's another insight.... Simply because the rest of the world is tied into your economy. If the US goes bust, it drags a lot of people with it. So while it certainly won't be a good thing, you still will be better off than those that are in third world countries now or in the future

[Stuart Mackey]

Well maybe they will vote for better a magement of it if they realise that the politicans are crippling it. Thing is that if they pay into it, they are entitled to its promiced benifits.

Thanks for the laugh

You have my sympathies..I am glad I live in NZ

[Spyder]

Yuk it up, kiwi. If everything goes to shit here, guess where those of us who can get the hell out will be going. If you think American TOURISTS are bad, wait until you get a country stuffed full of American expatriates.

I don't actually have a huge problem with that. But if any of you people go anywhere near the budget we will have to throw our sidewinder at you. (Actually throw)

[Darth Yoshi]

Where I live the ticket to retirement is and has been home ownership. Local tax laws keep prop tax low for people who are long term owners.

When you say "local" just how local do you mean?

Social Security was a good idea during the Depression, but the way it is now it's a major liability on the US. Of course, the seniors will never believe that, and even if they did they most likely wouldn't care.

[Joe]

Medicare is even worse. It creates the vast bulk of the unfunded liability our government will eventually have to deal with (SS only creates about 7 trillion).

[LadyTevar]

Without Medicare/Medicaid, my nephews would have no insurance, and my brother and sister-in-law, who both barely make minimum wage, would be unable to pay for hospital bills or medication.

Without Social Security, my mother would not be able to pay any of her bills, and would have to move in with one of the family.

I already know that in 30 years, when i get to retirement age, I'm not going to be able to. I have too many bills to be able to save money, and despite having a government job, I still make only $13,000/year. That's just shy of $800 a paycheck, of which I actually see only $450.

How can you save on that, when you have rent, car, bills, and food to buy for me, Nitram and cats? If we ever get sick, we're screwed.. I'm still paying off hospital bills from '01!

[Joe]

God damn troll fuckers. FUCK YOU, YOU PIECES OF SHIT!

[Crown]

God damn troll fuckers. FUCK YOU, YOU PIECES OF SHIT!

I take it this was directed to the TKers?

[SPOOFE]

They've had fifty years to do this you know...

A fifty-year period during which everyone's estimate of the US's debt was off by an order of magnitude? Hey, lemme tell you about this Moon Hoax...

[Joe]

God damn troll fuckers. FUCK YOU, YOU PIECES OF SHIT!

I take it this was directed to the TKers?

Yes, you can delete it if you want.

[Joe]

They've had fifty years to do this you know...

A fifty-year period during which everyone's estimate of the US's debt was off by an order of magnitude? Hey, lemme tell you about this Moon Hoax...

They do it with accounting tricks. The liability owed to social security and medicare is not included on most government financial documents, so most people never hear about it.

[Enforcer Talen]

who do we owe it to? is there an historical precedent for going to war, and telling the accts to forget the debt?

[SPOOFE]

They do it with accounting tricks. The liability owed to social security and medicare is not included on most government financial documents, so most people never hear about it.

Tell me what accounting tricks "they" do to set the figures off by an order of magnitude for five decades.

Or find a more reputable source.

[Joe]

They do it with accounting tricks. The liability owed to social security and medicare is not included on most government financial documents, so most people never hear about it.

Tell me what accounting tricks "they" do to set the figures off by an order of magnitude for five decades.

Or find a more reputable source.

Keeping liability owed to Medicare and Social Security off the books. Very simple.

[TrailerParkJawa]

When you say "local" just how local do you mean?

Social Security was a good idea during the Depression, but the way it is now it's a major liability on the US. Of course, the seniors will never believe that, and even if they did they most likely wouldn't care.

Darth Yoshi, I should have said state instead of local. I was refering to prop 13.

[SPOOFE]

Keeping liability owed to Medicare and Social Security off the books. Very simple.

You just keep going in circles. Such humongous shifty results would have been impossible to keep secret over a fifty year period.

[Darth Yoshi]

Darth Yoshi, I should have said state instead of local. I was refering to prop 13.

Ah, I see. Excellent.

[RedImperator]

Keeping liability owed to Medicare and Social Security off the books. Very simple.

You just keep going in circles. Such humongous shifty results would have been impossible to keep secret over a fifty year period.

Durran, feel free to correct me if I'm wrong on any of this:

Keep in mind that liability does not, technically, exist right now. It's the money we WILL owe to Social Security and Medicare recipients in the future. The problems in the system only really became apparent in the 1980s, when someone looked at the demographic data and realized that Social Security, a system designed so the cost of supporting one retiree would be spread among 15 workers, was going to have just two workers paying Social Security taxes for every person recieving a check sometime in the mid 20th century. The Medicare problem is the same, compounded by the fact that medicine has gotten enormously more expensive in the last 40 years and shows no sign of reversing that trend.

Now any accountant who doesn't work for Arthur Anderson will tell you that money that you WILL OWE in the future is a liability, but the government has been getting around this by setting up trust funds for surplus revenues. These surplus revenues have, since the beginning of the program, been dumped straight into the general fund and spent with the rest of the tax money while the government filled the trust funds with IOUs. To see how effective this is, write an IOU for $10 million to yourself and then try to cash it in next month.

That's where the $40 trillion dollar figure comes from. You take the actual debt owed by the Treasury, mostly to bondholders, add the estimated Social Security and Medicare liabilities from the point the systems start paying out more than they recieve in taxes, and you get a horrifyingly huge number that liberal doom-and-gloom pundits and conservative gloom-and-doom pundits agree on. The situation got this bad the same way the Y2K bug became a crisis--people ignored it until it was almost too late. It may well be too late, if the AARP decides to steal from the future for the sake of people who won't be affected by reform and will be dead by the time things get really bad.

In conclusion, we haven't just shifted $40 trillion dollars in spending off the books--you're right, that would be impossible to hide. The vast majority of this debt isn't from discretionary spending, it's an unfunded liability to millions of people who are going to start retiring in about 10 years. We've known about this liability for decades, but have kept the books balanced by filling the "trust fund" with IOUs, which would get you, me, and the Enron board of directors sent to jail, but is perfectly fine for the Feds.

[The Yosemite Bear]

I thought we had been "Broke" since the Civil War?

or allegedly except for Andrew Jackson uterly ruining our infrastructure, in order to pay off the national debt we have always spent more money then we made.

[RedImperator]

I thought we had been "Broke" since the Civil War?

or allegedly except for Andrew Jackson uterly ruining our infrastructure, in order to pay off the national debt we have always spent more money then we made.

Not quite the same. The U.S., so far as I know, has always had a debt. Alexander Hamilton figured out in the 1790's that the U.S. could leverage it's Revolutionary War debts into an asset. So long as we made the payments, it was in the European financiers' interests to ensure we remained independent and solvent--otherwise, they'd never get their money back. The debt ballooned in the Civil War and was never paid down to antebellum levels, but it was always much smaller than the gross domestic product (something like an individual carrying a few thousand dollars in credit card debt while making $100,000 a year).

The problem here is that the Social Security/Medicare liability will grow to the point we CAN'T pay it, even by selling off the Federal government's assets (mostly land) and borrowing. Even then, we wouldn't really be "broke"--all we'd have to do is announce we're cancelling Social Security and Medicare payments indefinitely, but that would be a political catastrophe and, frankly, horribly unfair to millions of people who paid into the system their whole lives with the expectation it would be there for them when they needed it. Also, Washington would almost certainly have to wait until it was impossible to save the system before it cancelled it, which means it would likely be trillions of dollars in the hole trying to keep it solvent by the time they finally gave up.

IIRC, there's precedent for this crisis. In the early 20th century, the majority of government expenditures were pension payments to war veterans. As we were fighting a major war every 20 years and those pension payments were transferrable to spouses after the veteran died, the whole program was quickly becomming a burdeon. It was finally scrapped after WWI, I believe--pensioners would still recieve their money, but new veterans would have different benefits (like the Montgomery GI Bill, which pays a lot of money to veterans but only pays it once in their lives). We're still paying those pensions, by the way--the last Civil War widow was still alive in the early 1980s, I believe, and the WWI vets that are still alive are still collecting them. That's the way Social Security is going to have to be fixed, in my opinion--those already in the system or soon to be in the system get their payments the way they always have, but younger workers will be moved into a different program which doesn't require the government to lay out vast sums of money for retirees (privitization, in other words). Medicare is an entirely different bucket of shit, and I don't see any way out of that mess yet.