Adding up all the Debt

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Woodman
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Adding up all the Debt

I tried to see if I could generate the Debt to GDP ratio Chris showed in his charts in blog poss 1/13/09 and 1/14/09.

2008 Grpss Domestic Product (GDP) = about $14T

I skimmed through the Management's Discussion and Analysis report CM referenced and other chapters in the US Financial Report here:

http://www.fms.treas.gov/fr/index.html

It's amazing to me, in this free country, the government is so open and clear with this data showing it is operating unsustainably, and in fact makes that conclusion more or less, yet we just allow it to go on and on. It's not just Social Security, the whole thing seems like a Ponzi Scheme!

The Financial Statement page 33 includes some amazing words that seem to say the US government has the ability to meet its present and future obligations because it has the power to tax, borrow, and print money.

I can see 2008 total net gov costs $3.6 T, net revenues $2.6 T, deficit in 2008 = $1T.  Deficit was 7% of GDP.  And debt ballooned while GDP took a downturn (I didn't look up all the exact rate of changes).

National debt now over $10 T, including public and intergovernmental borrowing.  Does everyone realize the government borrows from itself then pays it self back with interest?!?  Government debt alone is 71% of GDP if you include all borrowing, though it's not reported that way in Citizen's Guide to 2008 Financial Report of US Government.

 Total Credit market debt = about $52T (though that doesn't seem to include intragovernment debt).  Total Debt is now about 370% of GDP.

http://www.federalreserve.gov/releases/z1/Current/z1r-4.pdf

Entitlement programs (SS, medicare, etc) at net present value for net expenses projected 75 years adds up to $43T plus, depending on how it's calculated with what groups.  Add that in and we're at 679% of GDP.

The governments own reports show Social Security revenues fall below expenses by 2017 (remember when that used to be 20 or 30 years away?) and if all the money loaned to the General Fund were repaid with interest the system would only be solvent to about 2041. 

Now what about bailouts, fighting wars in IRAQ, etc., does that all get included in the total government debt reported, even if it's not in the deficit?  And how does the Fed's expanded balance sheet equate to additional debt burden on taxpayers, or is it indirectly though potential inflation etc?

Whatever, the debt is a huge number and it's growing exponentially!

Tom 

 

 

 

 

 

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Woodman
Status: Diamond Member (Offline)
Joined: Sep 26 2008
Posts: 1028
Re: Adding up all the Debt

Okay, I may not have stated something right above on the deficit, the net operating cost was $1T but the deficit for FY 2008 was $455B, not sure what the difference is, can someone offer a simple explanation?

And already in FY 2009 the government has exceeded the total deficit for all of last year.

http://www.fms.treas.gov/mts/mts0109.pdf

Woodman's picture
Woodman
Status: Diamond Member (Offline)
Joined: Sep 26 2008
Posts: 1028
Re: Adding up all the Debt

Okay, in the quest to understand this, I see on page 4 of the Citizen's Guide to the 2008 Financial Report of the United States the difference between the Net Operating Cost of about $1T and the Budget Deficit of $455 B was mostly due to increases in liabilities of Federal employee and veterans benifits.  Why have these grown so much suddenly?  Why are these liabilities included but not Social Security?

 

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