It’s no secret to anybody who’s been paying attention to budget numbers that the United States, with a current GDP of just under $14 trillion, is $52 trillion in the hole in one specific area: Medicare and Social Security payments owed to those who have already prequalified by paying into the system.

You can flip and fudge the numbers any way you want; no matter what, that’s some real money we’re talking about right there — and that’s just what’s already owed folks who are over 22 and in the workforce or have already retired, all having paid into the system at some point. The program could be ended today, and that’d be the unfunded liability we the taxpayers are facing: $52 trillion!

A Lack of Choice You Probably Didn’t Know About

Here’s something you might not know: the federal government skirts around this issue when doing its budgeting by counting Medicare and Social Security as “liabilities,” rather than “debts,” because those who are or will be eligible for returns under the programs have no actual binding or contractual right to those returns. That’s why you hear so much about a $7 trillion-ish national debt — that additional $52 trillion is left out of the discussion through a nefarious governmental play on words!

Here’s something else you might not — actually, probably don’t — know: Current and future Medicare costs for those already owed benefits make up over 60% of that liability ($32.3 trillion). Given this, you might think it a good idea to opt out of a Medicare program that probably won’t be solvent enough to cover the costs of your care as a retiree, in favor of a Health Savings Account or some other less costly, more efficient health insurance plan, which you can help pay for with your meager Social Security benefit checks.

Unfortunately, that’s not an option under federal law. Whether there’s money to fund your Medicare or not, once you’re retired, you’re legally required to accept Medicare as your health coverage. If you try to turn down Medicare Part A and go with another, more cost-effective (and higher quality) form of coverage, you officially forfeit your ability to collect on the Social Security benefits you paid into your entire working life!

Read More →

Marred by a week-long cycle of bad press and Cabinet defections, President Obama’s $787 Billion stimulus package passed both houses of Congress last night, despite the rigid partisan-divide.

Clearly emboldened by their unanimous “No” votes on the first version, House Republicans, masterfully corralled by Minority Whip Eric Cantor (R-VA), held the line yet again. Three Senate Republicans – Arlen Spector (R-PA), Olympia Snowe (R-ME), Susan Collins (R-ME) – broke rank and voted for the President’s stimulus package for fear the situation would become “much worse without this bill.”

Obama’s crusade to saddle future generations of Americans with $1 trillion in debts, notwithstanding stagflation, will result in nothing more than supplementing their paychecks with a disgraceful $8 a week pat on the back.

The American Recovery and Reinvestment Act of 2009 equals 5.7% of America’s Gross Domestic Product (GPD), whereas President Roosevelt’s New Deal, at its height of fiscally irresponsible, equaled approximately 2%. The gross spending called for by bill – mandated by Congressional Democrats and President Obama – is equal to or larger than the GDP of 157 nations – all but 14 countries listed in the International Monetary Fund’s database for 2007. Among those countries dwarfed by the unprecedented spending are United Arab Emirates, Dominican Republic, Iran, Taiwan, and Israel.

President Obama, by his own admission, owns this recovery bill, the largest of its kind in US history. “Congress has passed my economic recovery plan –- an ambitious plan at a time we badly need it,” he said in his weekly address this morning. Like FDR’s socially-transformative welfare policies, the implications of this bill’s sheer size and scope will likely not be known for several years, if not decades. But as Americans wake to the sobering reality that we’re now indebted to China, Saudi Arabia, and other hostile foreign creditors for trillions all for naught, Republicans would do well to remember just whose “economic recovery plan” this was.

Read More →