Our national debt is out of control – nothing new there. But when I look at the national debt, I see a future of unfunded promises.
That’s because the national debt is just one slice of a bigger, nastier liability pie that could be too much to handle someday.
A good ballpark for our debt right now is about $21.2 trillion. Believe me, those decimal points matter. The difference between $21.1 trillion and $21. 2 trillion is $100 billion!
When you add in state-level debt, the total bill grows to $24.3 trillion. That’s more than 20 percent of our total gross domestic product (GDP).
But here’s the scary part – when you also include corporate debt, mortgages, credit card debt and student loans, it totals about 330 percent of our GDP!
It gets worse though.
The “unfunded promises” I mentioned earlier refer to Medicare and Social Security obligations that may not be met. In other words, people won’t receive much-needed health care and income benefits.
Both programs are experiencing negative cash flows, and as such, need more money from Congress to pay the promised benefits.
As of now, Social Security will be in trouble starting in 2034. For the hospital portion of Medicare, it’s 2026. Social Security has a $13.2 trillion unfunded liability over the next 75 years. Medicare’s is $37 trillion.
That’s another $50 trillion added to the trillions we already have in debt.
But really, does it matter if it’s $50 trillion or $250 trillion? Either one is unfathomable.
Regardless of which figure is correct, we know the debt is high.
How do we solve it? It seems we’ll have to cut spending, raise taxes, or both.