The Congressional Budget Office (CBO) forecasts the U.S. budget deficit will hit $1.3 trillion this year. An astronomical figure, to be sure, but that’s lower than was projected in March. It’s also less than last year’s record $1.41 trillion deficit, which was close to 10% of GDP.
And, that’s the good news.
As the deficit grows so does the national debt, which is currently more than $13.3 trillion, according to official figures.
But the situation is actually much, much worse, according to Boston University economics professor Laurence Kotlikoff.
“Forget the official debt,” he tells Aaron in this clip. The “real” deficit – including non-budgetary items like unfunded liabilities of Medicare, Medicaid, Social Security and the defense budget – is actually $202 trillion, the professor and author calculates; or 15 times the “official” numbers.
“Congress has engaged in Enron accounting,” says Kotlikoff, who recently penned an op-ed for Bloomberg entitled: The U.S. Is Bankrupt and We Don’t Even Know It.
Yet, the debt market continues to have an insatiable appetite for U.S. Treasuries; heading into Monday’s session, the yield on the 30-year Treasury bond (which moves in opposition to its price) was at its lowest level since April 2009.
Kotlikoff says that’s because the market is focused on the “mole hill” of official debt. In time, the U.S. will have a major inflation problem to rival that of Germany’s post World War I Weimar Republic, he predicts. “We have to think about the fact that unless the government gets its fiscal act in order we’re going to have the government printing lots and lots money to pay these enormous bills that are coming due over time.”
America is in need of major reform of the health-care, retirement, tax and financial system, Kotlikoff continues. “We need (to perform) heart surgery on this economy, not putting on more band-aids which is what we’ve been doing.”
Barring that, your hard-earned dollars will soon be worthless, he declares.
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Hello. This comment is not about this article. Rather, I am writing regarding an article written about a year ago claiming an impending Civil War in the US. Whatever happened to that? I am suspicious of this websites journalistic integrity. :-|
A pity your article didn’t make it David. That a 2nd civil war could be related to a few hundred trillion debt for taxpayers seems reasonable though
:-D
But I wonder if enough revolutionaries have been left. Fluoridation of tap water is common in the US and yet the Pooh-Bahs in charge knew the disastrous effects on the population long ago:
—–
– USAF Major George R. Jordan testified before Un-American Activity committees of Congress in the 1950’s that in his post as U.S.-Soviet liaison officer, the Soviets openly admitted to “Using the fluoride in the water supplies in their concentration camps, to make the prisoners stupid, docile, and subservient.”
– The first occurrence of fluoridated drinking water on Earth was found in Germany’s Nazi prison camps. The Gestapo had little concern about fluoride’s supposed effect on children’s teeth; their alleged reason for mass-medicating water with sodium fluoride was to sterilize humans and force the people in their concentration camps into calm submission. (Ref. book: “The Crime and Punishment of I.G. Farben” by Joseph Borkin.) Read, US Lend/Lease Sent Fluoride to USSR to make prisoners docile…at http://66.102.9.104:80/search?q=cache:mnnaokzICRoJ:boards.historychannel.com/thread.jspa?threadID=800000240&messageID=800007763%2Bfluoride%2Bnazis&hl=en&ct=clnk&cd=4&gl=uk
– 97% of western Europe has rejected fluoridated water due to the known health risks, however 10% of Britons drink it and the UK government is trying to fast track the fluoridation of the entire country’s water supply.
http://miami.indymedia.org/news/2008/03/10729.php
“The issue which has swept down the centuries and which will have to be fought sooner or later is The People vs. The Banks.”
– Lord Acton, Lord Chief Justice of England, 1875
“The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it all back again. However, take this great power away from them, and all the great fortunes like mine disappear, and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create money and control credit.”
– Sir Josiah Stamp, President of the Bank of England in the 1920s, the second richest man in Britain
The U.S. will recover as soon as the Democrts and Obama is voted out.
Goldman Sachs is a jewish supremacist banking organization that destroyed America and turned us into the Jewish-led US-Federal-Empire for the advancement of the Jewish Master Race over all others they consider sub-human and the Extermination of all other people groups and humanity.
What also could be mentioned is that the US govt uses creative bookkeeping so the numbers look better than they are. One only has to read a few articles from
http://www.shadowstats.com/ to know that real unemployment figures are about 22%, the GDP is rigged and the rating agencies are corrupt.
Without those corrupt agencies foreign investors couldn’t have been suckered into buying AAA rated “securities” which turned out to be utter trash.
Summarized, the economic condition of the USA is far worse than prof. Kotlikoff describes. Only a bankrupt nation like the USA needs a PPT (Plunge Protection Team) to shore up the DOW: without it, the DOW would be around 5,000. Because jobs continue to disappear in the US but 70% of GDP comes from consumer spending, recovery there is a pipe dream.
Get rid of the mass murdering, banker gangsters and their usury then the world will be much better place.