Do you know how enormous one trillion dollars is? If you were alive when Christ was born, and on that day you started spending a million dollars every single day, you still would not have spent one trillion dollars by now. If right this moment you went out and started spending one dollar every single second, it would take you over 31,000 years to spend one trillion dollars. A trillion $1 bills, if they were taped end to end, would wrap around the globe more than 38 times. That is how big one trillion dollars is. But right now, if the U.S. government could actually reduce the federal budget deficit to one trillion dollars that would be a major victory. In 2009, the U.S. government ran a budget deficit of more than 1.4 trillion dollars. The U.S. government will run a budget deficit of more than 1.4 trillion dollars in 2010. Not only that, the Obama administration is already admitting that the budget deficit will be over 1.4 trillion dollars again in 2011. In fact, the truth of it is that we are looking at trillion dollars deficits for as far as the eye can see. In the process we are piling up the biggest mountain of debt the world has ever seen. What we are doing to future generations is unfathomable. Servicing this monolithic debt is going to devastate the U.S. economy and is going to absolutely crush the American Dream for future generations of Americans. But we can't seem to help ourselves. We just keep spending.
As of June 1st, the total U.S. National Debt was $13,050,826,460,886.97.
For those who aren't used to seeing such big numbers, that is over 13 trillion dollars.
It is a debt that it literally impossible to every pay off.
But we are still adding to it at a breathtaking pace.
How long do you think that we can continue to run federal budget deficits equivalent to 10 percent of GDP before this whole thing collapses?
The truth is that anyone with a brain knows that these kinds of deficits are not anywhere close to sustainable.
According to a U.S. Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015.
So we'll cross the $20 trillion mark some time in 2016?
Already, the U.S. government has to borrow 41 cents of every dollar that it spends.
We just can't keep spending nearly twice what we are bringing in.
But the debt addiction of the U.S. government just keeps rolling on. It is projected that the U.S. government will issue nearly as much new debt in 2010 as the rest of the governments of the world combined.
Now that is a lot of debt!
Unfortunately, there is every indication that things are going to get even worse. The following are 10 reasons why we might not see anything less than a trillion dollar deficit for decades to come....
1 - Tax revenues are way, way down. Tens of millions of Americans either don't have jobs or are significantly underemployed. Without jobs, these tens of millions will not be paying taxes. Instead, they will be a massive drain on the system. Already, over 40 million Americans are on food stamps and the U.S. government says that is going to increase by several million more in 2011. Of course the solution would be to put these tens of millions back to work in good jobs, but we took all their good jobs and shipped them off to China and the third world in the name of "free trade".
2 - A huge percentage of the U.S. federal budget is made up of entitlement programs such as Social Security and Medicare that cannot be cut without a change in the law. Approximately 57 percent of Barack Obama's 3.8 trillion dollar budget for 2011 consists of direct payments to individual Americans or is money that is spent on their behalf.
3- The Social Security program is in huge, huge trouble. According to the Congressional Budget Office, this year the Social Security system will pay out more in benefits than it receives in payroll taxes. This was not supposed to happen until at least 2016. The Social Security trust fund is supposed to have $2.5 trillion sitting in it to pay the benefits for all the Baby Boomers that are now retiring, but over the last 30 years the U.S. government took all that money out and spent it on other things.
4- There simply are not nearly enough workers to support all the people who are now retiring. Back in 1950 each retiree's Social Security benefit was paid for by 16 workers. Today, each retiree's Social Security benefit is paid for by approximately 3.3 workers. By 2025 it is projected that there will be approximately two workers for each retiree.
5- The shortfall in entitlement programs in the years ahead is mind boggling. The present value of projected scheduled benefits exceeds earmarked revenues for entitlement programs such as Social Security and Medicare by about 46 trillion dollars over the next 75 years. So that means that the U.S government is going to have to find an extra 46 trillion dollars from somewhere to pay all those benefits.
6 - According to an official U.S. government report, exploding interest costs on the U.S. national debt together with spending on major entitlement programs such as Social Security and Medicare will absorb approximately 92 cents of every dollar of federal revenue by the year 2019. That is before a single dollar is spent on anything else. So you can cut and slash all other areas of the U.S. government budget to the bone, but until you do something about entitlement programs you will have solved nothing.
7 - Right now, interest on the U.S. national debt and spending on entitlement programs like Social Security and Medicare is somewhere in the neighborhood of 15 percent of GDP. By 2080, those expenditures are projected to eat up approximately 50 percent of GDP.
8 - We are in such bad shape already, and the new health care law that was recently enacted is going to make things even worse. The Congressional Budget Office projects that the health care bill recently passed by Congress will add over a trillion dollars to our debt over the next ten years.
9- Unfortunately, the American people don't have much more money that can be squeezed out of them. The truth is that as a society, we are up to our eyeballs in debt. The total of all government, corporate and consumer debt in the United States is now approximately equivalent to 360 percent of GDP. That is a far higher debt burden than anything we have ever experienced - even during the Great Depression.
10 - If you try to cut Social Security, Medicare of other important government programs, the American voters will cry bloody murder. The lobbies for those receiving entitlement payments are extremely powerful. You won't hear a whisper from most politicians about cutting Social Security. The truth is that they want to keep getting elected. The American people like getting their checks, and they will not take too kindly to anyone who tries to take them away or reduce them.
So we have got a real mess on our hands. It is political suicide to suggest severe cuts to entitlement programs, but without major changes those programs are absolutely going to bankrupt us.
In addition, any major cuts to government spending are going to hurt the already struggling U.S. economy. But if the economy gets even worse, American voters will be even more likely to vote out those currently in Washington. So those politicians who value their jobs understand that boosting the economy through government spending is their best bet if they want to keep their jobs.
But shouldn't someone be looking out for the long-term interests of the American people?
Shouldn't someone be concerned about all of this debt that we are piling up?
Well, politicians like that are very few and far between. There are some who will talk about it, but very, very few who will ever do much about it.
But this gigantic mountain of debt grows every day and it is never going to go away.
There will only be so many times that dealing with this debt can be put off for another time.
In the end, debt will always have its day.