Thoughts & Commentary on the Obama Administration

**Alexander the Pretty Good** · 05-27-2009, 05:10

See, I think I've seen the light. Japan's leveraged to the hilt - they have something like 170% of their GDP in national debt. It doesn't matter though! They're fine! We basically have infinite money. I for one hope to get a luxurious welfare package to sit around playing TF2 all day.

**Lemur** · 05-27-2009, 05:43

Originally Posted by Alexander the Pretty Good

We basically have infinite money.

A little perspective ...

Note that the spendthrift Irish have a per capita debt of $549,819. Yikes! Can we foreclose on the Emerald Isle?

**Xiahou** · 05-27-2009, 07:09

Originally Posted by Lemur

A little perspective ...

Note that the spendthrift Irish have a per capita debt of $549,819. Yikes! Can we foreclose on the Emerald Isle?

Don't forget our government conveniently leaves out the unfunded liabilities of things like Medicare and Social Security. Last year, Richard Fisher, the head of the Federal Reserve bank in Dallas pegged the unfunded liabilities from these programs to be 99.2 trillion!

Originally Posted by Fisher

Add together the unfunded liabilities from Medicare and Social Security, and it comes to $99.2 trillion over the infinite horizon. Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent and Social Security the remaining 14 percent.

I want to remind you that I am only talking about the unfunded portions of Social Security and Medicare. It is what the current payment scheme of Social Security payroll taxes, Medicare payroll taxes, membership fees for Medicare B, copays, deductibles and all other revenue currently channeled to our entitlement system will not cover under current rules. These existing revenue streams must remain in place in perpetuity to handle the “funded” entitlement liabilities. Reduce or eliminate this income and the unfunded liability grows. Increase benefits and the liability grows as well.

How's that for perspective?
What's funny is that in his budget estimates from his speech last May, put the 2009 deficit around 400 billion. Clearly, he grossly underestimated our government's ability to spend.

For a different perspective, you can look at the Treasury Dept.'s 2008 financial statements, where they put 2008's "Total present value of future expenditures in excess of future revenue" at a meager $43 trillion. I'm pretty sure the accounting that we use to arrive at our modest $13 trillion dollar debt would probably land any organization other than the government in some regulatory hot water. (Then again, I'm not an accountant- maybe one will pop in here and explain it all to us)

**Tribesman** · 05-27-2009, 07:44

Note that the spendthrift Irish have a per capita debt of $549,819.

Its not so much spendthrift, just a demontration that fuelling growth by a combination of low taxation, credit and reducing regulation doesn't work.

Can we foreclose on the Emerald Isle?

You can try, but due to the right wing approach to business and finance that was practiced there are no real assets to sieze only fictional ones so forclosure doesn't get you anything

**Kralizec** · 05-27-2009, 08:31

Originally Posted by Lemur

A little perspective ...

Note that the spendthrift Irish have a per capita debt of $549,819. Yikes! Can we foreclose on the Emerald Isle?

External debt isn't the same as government debt. External debt is all money owed by citizens, corporations and the government to outside parties (and doesn't take into account money owed to them by outside parties). It's to be expected that Switzerland would have a "bad" rating in that link of yours because of its banks. Or the Netherlands, wich according to that link have an external debt rating of 268% while the government debt is well below 60%.