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No, it's not Wall Street. It's the U.S. government.
A joint report from the White House budget office and the Treasury Department showed that the federal government's spending commitments soared by 25% in 2008, putting taxpayers another $1 trillion in the hole. What's even worse is, the government's fiscal year ends in september, so those numbers don't include the $800 billion financial bailout or other federal spending in the last calendar quarter of 2008. You might as well call the calendar year 2008 deficit a $2 trillion hole, and that's only if you don't count the growth of the government's unfunded liabilities (the government doesn't count it), which are estimated to grow at a rate of $2 trillion annually. That makes the real federal deficit for 2008 approximately $4 trillion. And that number doesn't count all the state and local government deficits. I don't even have a figure for that, but I know the states and localities are also looking for our broke federal government to bail them out, so they cannot be solvent. Let's guess-timate the entire government deficit for 2008 to be $5-6 trillion.
That sounds like a jet plane heading 500mph into an economic mountain side to me.
I think this should end the "Bush is a conservative" talk, at least when it comes to economics. And president-elect Obama is pushing another $850 billion stimulus package, and another $200 billion for his health care plan, which will undoubtedly cost much more than that. That economic mountain looks like Mt. Everest.
And now for the bad news.
The Washington Times wrote an article about Bush's annual economic (disaster) report, and in it was the following tidbit of information:
The report showed that U.S. debts and liabilities are close to passing the value of the U.S. population's net worth, said Peter G. Peterson Foundation, a nonprofit organization devoted to promoting fiscal responsibility.
Yikes. Our government has committed to spending the entire wealth of all the households in the country. I don't know about you out there, but to me that seems like a VERY BAD THING.
Here's more bad news:
The report said current revenues are sufficient to pay only half of what the government will owe in 30 years and that the government's debt has put the country on a path to "create financial sector instability, increasing risk and uncertainty across many sectors of the U.S. economy."
So, we can either double or triple taxes, an economy killer of an idea if I ever heard one, and one guaranteed to drive us all to the poor house, or we can make radical changes in government, reducing it's size drastically. That's our real world choice.
Too bad we don't have many politicians who live in the real world. Most don't even acknowledge it's existence. The reality is, the United States government is the most overleveraged institution on the entire planet. It's Enron times a billion. When that changes, it will be some real change I can believe in. Until then, our politicians are just blowing smoke, as usual.