For 39 of the past 40 years the US government was allowed deficit spending. Our federal government is providing us with more services than we are paying for. The difference (the deficit) is made up by the US selling more Government Bonds that will be paid in the future by later tax payers.
By definition A Ponzi scheme is an operation that pays returns to current investors (tax payers) from the money paid by subsequent investors (our kids and grandkids). It usually offers returns that other investments cannot guarantee (living above our means).
The 2008 deficit was:
- $12 Trillion current liabilities
- $ 7 Trillion unfunded Social Security obligations
- $34 Trillion unfunded Medicare obligations
- $ 1 Trillion miscellaneous (federal insurance, loan guarantees, leases)
$53 trillion is what the Federal Government currently owes and translates to:
- $184,000 per person living in the US
- $435,000 per full-time worker
- $483,000 per household
Just for perspective a trillion is 1,000,000,000,000 or one million million
To get a better perspective go to http://www.youtube.com/watch?v=O_TjBNjc9Bo
Or rent the CD “I.O.U.S.A”
It is all very sobering!