US Debt and Financial Promises to Close in on $100 Trillion This Year
Guest post by Joe Hoft
As explained in new book Falling Eagle – Rising Tigers, a government deficit or surplus is measured by calculating the difference between government receipts and government spending over a period of time which is usually a single year. A deficit occurs when the expenditures exceed revenues collected by a government; a surplus is when revenues exceed spending.
The difference between deficits and debts are that deficits occur when government expenditures exceed government revenues or receipts usually measured on an annual basis. Debt is the amount of money a country borrows to support its continued existence. A country’s debt is basically its accumulated deficits.
In the United States the war on poverty has greatly impacted the US federal debt load. When Obama took over as President of the United States in early 2009 the US federal debt load was somewhere near $9.6 trillion. By fiscal year 2012 the US debt had risen to $16.7 trillion. In each of Obama’s first four years in office the annual deficit remained over $1 trillion per year and to date this administration is averaging more than $1 trillion in deficits annually.
As unbelievable as that may seem, the US government is also precluded from reporting the real amount of the debt owed by taxpayers. Even more alarming than the US’s annual deficits or federal debt burden is the amount of its unfunded liabilities. Unfunded liabilities are financial promises made with no money held in reserve to support these promises
As of the end of 2012, the actual liabilities of the US federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—were estimated to exceed $86.8 trillion, or 550% of the entire US GDP. In addition, as reported by Chris Cox and Bill Archer, in 2012 in the online Wall Street Journal, for the year ending December 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. This means that these programs are adding $7 trillion annually to the US debt load but this $7 trillion is not counted in the amount of growing US debt or accounted for in its annual deficits. At the current rate, the US will have almost $100 trillion in financial debt and promises due at the end of 2014, but the American public will only know about the small portion of this amount, the already massive $17 trillion in debt outstanding.
Most Americans believe the cause of the debt increases is due to our national defense budget, but this is the only category in the federal budget decreasing under the Obama Administration. The real cause for the budget busting debt and deficits is the inefficient and ineffective social programs in America today. See more on the real causes of the US fiscal nightmare in my book Falling Eagle – Rising Tigers.
See www.joehoft.com for information about the author and how to order your own copy of Falling Eagle – Rising Tigers.