The Real National Debt: 222 Trillion

I'm not sure bankrupt is a strong enough word to describe America's economic situation. The Congressional Budget Office now estimates that the gap between long term projected spending and projected revenue is $222,000,000,000,000.

Even now, at the edge of the abyss, no politicians, from either party, are proposing to take actions that are sufficient to effectively deal with the problem. I suspect that's because the cure for our problem is medicine the patient will never consent to take.

Blink! U.S. Debt Just Grew by $11 Trillion

Republicans and Democrats spent last summer battling how best to save $2.1 trillion over the next decade. They are spending this summer battling how best to not save $2.1 trillion over the next decade.
In the course of that year, the U.S. government’s fiscal gap -- the true measure of the nation’s indebtedness -- rose by $11 trillion.

The fiscal gap is the present value difference between projected future spending and revenue. It captures all government liabilities, whether they are official obligations to service Treasury bonds or unofficial commitments, such as paying for food stamps or buying drones.
Some question whether “official” and “unofficial” spending commitments can be added together. But calling particular obligations “official” doesn’t make them economically more important. Indeed, the government would sooner renege on Chinese holding U.S. Treasuries than on Americans collecting Social Security, especially because the U.S. can print money and service its bonds with watered-down dollars.

For its part, economic theory sees through labels and views a country’s official debt for what it is -- a linguistic construct devoid of real economic content. In contrast, the fiscal gap is theoretically well-defined and invariant to the choice of labels. Each labeling choice changes the mix of obligations between official and unofficial, but leaves the total unchanged.
Dangerous Growth

The U.S. fiscal gap, calculated (by us) using the Congressional Budget Office’s realistic long-term budget forecast -- the Alternative Fiscal Scenario -- is now $222 trillion. Last year, it was $211 trillion. The $11 trillion difference -- this year’s true federal deficit -- is 10 times larger than the official deficit and roughly as large as the entire stock of official debt in public hands.
This fantastic and dangerous growth in the fiscal gap is not new. In 2003 and 2004, the economists Alan Auerbach and William Gale extended the CBO’s short-term forecast and measured fiscal gaps of $60 trillion and $86 trillion, respectively. In 2007, the first year the CBO produced the Alternative Fiscal Scenario, the gap, by our reckoning, stood at $175 trillion. By 2009, when the CBO began reporting the AFS annually, the gap was $184 trillion. In 2010, it was $202 trillion, followed by $211 trillion in 2011 and $222 trillion in 2012.

Continued

http://www.bloomberg.com/news/2012-0...-trillion.html

Very sad what politicans (and American voters) have done to this once great nation.

Very sad what politicans (and American voters) have done to this once great nation. Originally Posted by Whirlaway

What we have done is immoral. We were given an inheritance of great worth and we have squandered it. Now we have nothing to pass on to the next generation, nothing but debt.

Our descendants will curse us.

And it was the generation after WWII (the Boomers) that were the worse spenders, doing most of the destruction.

The problem really began with the New Deal, under FDR, and exploded with LBJ and his Great Society. The camel got his nose under the tent with FDR. The whole camel got in the tent under LBJ, and now Obama is letting in the herd.

I don't blame the Americans for voting for the New Deal; the depth of a depression...desperation was all around..............if our problems were limited to the New Deal and other FDR programs we would have a manageble problem....but once boomers got the right to vote, it was Katy Bar the Door on spending, growth of government entitlements, regulations, etc.....and they were both Republicans and Democrats.

I certainly understand the circumstances that caused people to be receptive to the New Deal. FDR took advantage of the people's fear and desparation in order to violate the Constitution. It's true, that if we had not advanced beyond the New Deal, we would not be in this mess. Unfortunately, once we crossed the line of having social welfare programs that were clearly unconstitutional, we made it essentially inevitible that more programs would follow.

Had there never been a New Deal, there never could have been a Great Society, and without the Great Society, we wouldn't have had all the other entitlement programs that are bankrupting us.

The Supreme Court never should have allowed the New Deal to be implemented. They are the guardians of the Constitution and they failed to protect it.

American voters could have voted "no" many times over and over against big government, entitlements, deficit spending, etc.....but we didn't....

The blame is on us. Not SCOTUS....in many ways Robert's had it right in his decision...

"ultimately voters will have to decide which policy path they want the country to pursue"

I nievely thought SCOTUS was there to protect us from ourselves; but the Robert's opinion says otherwise...he must believe the Constitution IS a living document.....his opinion is a notice for Conservatives to get off the idea of orignial intent and start writing Amendments which reign in government.....SCOTUS won't do it, politicans won't, WE THE PEOPLE must.

Romney should start with reviving the Balanced Budget Ammendment. Then on to the other issues...

A Constitutional Convention ?

I kind of blame the people of the 30s but I hold most of the blame for FDR and his socialist cabal which is not rhetoric. Many of them were admitted socialilsts. Take the lesson of Sweden; the king ordered all the people to turn in their currency by a certain day. Which he could because he changed the currency that day. The banks only gave back half of what they recieved. You bring in 5000 Kroner and you got 2500 Kroner back. It stopped the depression (there was no great in Europe) right in it's tracks. Sweden was the first country to get out of recession within six months. The value of the currency increased so that the Swedish people ended up losing less than when they first started.
We elect representatives to make unpopular decisions and not just the popular ones. If that is what we really needed then we should have a pure democracy and get rid of the representative republic that our founders put together.

Nope; the debt of America c 1940 was $43 billion......chump change....FDR and his New Deal may have been bad politics and constitutionally abhorent, but they were NOT big spenders......

Our modern day politicans spend $43 billion on a single line item with a blink.........the blame is all on American voters starting in the 1960s, accelerated with Boomers who were spoiled kids and wanted more and more free shit from the government...and on top they wanted to indulge their liberal sensitivies that everyone is a victim and it is the government's responsibility to help them......Bush I called it Conservatism with a Conscience and Bush II called it Compassionate Conservative...in both cases it was big government, big spending, big debt thinking.

I kind of blame the people of the 30s but I hold most of the blame for FDR and his socialist cabal which is not rhetoric. Many of them were admitted socialilsts. Take the lesson of Sweden; the king ordered all the people to turn in their currency by a certain day. Which he could because he changed the currency that day. The banks only gave back half of what they recieved. You bring in 5000 Kroner and you got 2500 Kroner back. It stopped the depression (there was no great in Europe) right in it's tracks. Sweden was the first country to get out of recession within six months. The value of the currency increased so that the Swedish people ended up losing less than when they first started.
We elect representatives to make unpopular decisions and not just the popular ones. If that is what we really needed then we should have a pure democracy and get rid of the representative republic that our founders put together. Originally Posted by JD Barleycorn

The Democrats have done a masterful job of propaganda in getting people to believe that FDR saved us from the Great Depression. The truth is, FDR's policies prolonged the Depression.

I recommend Amity Shlae's brilliant book "The Forgotten Man" for an explaination of how FDR's policies actually made our economic situation worse.

http://reason.com/archives/2007/12/1...-forgotten-man

I don't think anyone is saying that FDR is responsible for the size of the debt but he bears a lot of responsibility for selling the idea.

Yep got that right...but the size of the debt is what the threat is all about.........

Question: We have massive debt that will almost certainly never be repaid. Countries and banks are still loaning us money. What do they hope to get? What's in it for them?

I hear one wants Yellowstone and others the minerals at White Sands....and some want all the water rights outta the Platte, while others want the Old Growth Timber in Redwood National Forest.....the list is endless for the world courts to divided up American assets when we declare bankruptcy............it's gonna be one hell of a garage sale.