Debt for Our Kids: $211 Trillion
The Congressional Budget Office just released its annual long-term fiscal forecast. It shows, after some simple calculations, that our government’s fiscal gap — the bill presumably being left to our children — has grown enormously over the past year…. country’s indebtedness. How big is the fiscal gap? By my own calculations using the CBO data, it now stands at $211 trillion — a huge sum equaling 14 times the country’s economic output.
The gap was $205 trillion last year, measured in today’s dollars. That’s an increase of $6 trillion. By contrast, the government’s count of official debt held by the public is $10 trillion — $850 billion more than last year’s figure, after adjusting for inflation. Hence, the real deficit we should be worrying about is more than six times larger than the $850 billion official deficit capturing all the attention…. What accounts for the extra $5.15 trillion? In part, the CBO is now projecting somewhat smaller future taxes. But the main reason is that we are one year closer to having to pay 78 million baby boomers roughly $40,000, on average, per year in Social Security, Medicare and Medicaid benefits.
Full article by Larry Kotlikoff worth reading.
I’m reminded of Greece, where they are rioting because of the proposed austerity measures needed to get a bailout. Who knows, a similar scenario may occur in the United States in the decades to come.
Scary, very scary.
34 days…
This will make for some interesting times.
Should future non-tax payers be that worried? In other words, will the debt be owned mostly by those kids who at least have some capacity to pay for it?
Thomas Jefferson best described this problem in a leter to James Madison, he famously wrote that “The earth belongs to the living.” It’s a quote I always remember when I see such unnerving data.