An Irresistible Force

By John Lumbard.

In the upper left corner of this page you’ll see a pretty little girl wearing a sign saying that she’s $38,375 in debt.  That number is now $57,764, if you’re willing to use the Enron accounting standards of the federal government, which don’t acknowledge that she’s carrying liability for Social Security promises that we can’t pay.  Medicare is actually much worse, but this year the Social Security Administration is sending out benefit statements—estimates of how much you’ll get per month when you retire—that say:

“Your estimated benefits are based on current law.  Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2033, the payroll taxes collected will be enough to pay only about 77% of scheduled benefits.”

It’s one thing to read about future financial problems in a blog like this, and quite another when you receive a document from the federal government that says, in effect, “we don’t have a clue how we’re going to actually pay you the amounts shown on the preceding pages.”

Another way to look at the debt is to note that the burden only falls on our children.  Older Americans have already derived lots of benefit from running up the debt—borrowing all that money allowed us to get more services and pay lower taxes—and it will be years before any of us have to help pay the oversized taxes of the future.  Retirees are still getting “too much” Medicare and Social Security …. So let’s just say that, instead of calculating the debt per American ($18.6 trillion divided by 322 million Americans), we’re going to calculate the debt per young American.   The debt per young American—the younger half of the population—is $115,528.

We probably started this blog in 2010, with the debt at $12 trillion or so.  I’m supposed to update the numbers, but I keep falling behind because they just keep growing.  Inexorably.



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