Drudgereport.com had this headline: “USA has record $61.6 TRILLION in unfunded obligations; $534,000 per household…” The link leads to this report in USA Today. It is a powerful reminder that the United States is in a terrible financial situation and the current levels of government spending are unsustainable.
Read the whole thing but below are a few highlights:
The federal government’s financial condition deteriorated rapidly last year, far beyond the $1.5 trillion in new debt taken on to finance the budget deficit, a USA TODAY analysis shows.
The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 trillion the total of financial promises not paid for.
This gap between spending commitments and revenue last year equals more than one-third of the nation’s gross domestic product.
The $61.6 trillion in unfunded obligations amounts to $534,000 per household. That’s more than five times what Americans have borrowed for everything else — mortgages, car loans and other debt. It reflects the challenge as the number of retirees soars over the next 20 years and seniors try to collect on those spending promises.
The government has promised pension and health benefits worth more than $700,000 per retired civil servant. The pension fund’s key asset: federal IOUs.
The numbers in USA Today are astounding but it isn’t an isolated report. Back in May, Senator John Barrasso of Wyoming released this statement which says:
The numbers don’t lie. Every day, this government borrows another $4.1 billion. We are borrowing at a rate of more than $2 million per minute. Forty cents of every dollar Washington spends is borrowed money, much of it from China. Every American child born today and tomorrow and the next day owes more than $45,000.
The federal government cannot continue to operate this way. It is more clear than ever before that one day soon our nation has to make difficult choices or foreign investors will make those decisions for us as they are doing for Greece.
So what will local governments do when the federal funds dry up? The Wall Street Journal article Threats to Town Halls Stir Voter Backlash shows that budget woes are already forcing some local governments to consider consolidation against the wishes of many constituents. Here in North Fulton we need only look back to the consolidation of Milton County with Fulton County that occurred during the last Great Depression to see what happens when a municipal government is not sufficiently prepared for the fiscal issues it can face.
The current fiscal policies of the United States federal government are unsustainable. The gravy train of federal deficit spending is nearing the end of the line. Will Georgia and its municipalities be prepared when it does? I hope so.