Let me make this easy for everybody.
We, the people, in the form of our various governments, have been making a variety of promises with dollar signs attached… where said dollars would be paid in the future.
We do not have the money to cover those promises, as they are currently constituted. You can get into the squiggly details of discount rates, “bending the cost curve”, death panels, soaking the rich, and whatnot, but the bottomline is that the demographics are not favorable and when the demographics were favorable and the promises were made, not enough money was not set aside to fulfill the promises:
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 $527,000 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.
Now, I agree that these promises will not bankrupt the U.S. — because they likely will not be fulfilled. And this is going to hit with the Boomers, because they are much too big a demographic bulge with too few to follow.
So I’m not particularly worried about things as my expectations are low to begin with. Unsustainable stuff will not be sustained.
But you know, some people may get cheesed off when they don’t get 100% of what they expected.