How long until US default?

[carlover]

Just another example of twisting the data to match your pre-determined result. Notice in the chart that for the US he lists total government obligations, but conveniently for the rest of the world he only lists debt. Japans debt is close to 200% of GDP, Italy’s is over 100%, funny that no one mentions those, and certainly no one is parading out comments of those countries going insolvent. Are we in a bad situation right now, YES, will the whole country collapse as a result, I’ll put my money that it won’t!

[peterb]

If in fact the US does spend ~20% of its income on servicing the debt, then that seems like a pretty sustainable DTI ratio.
Just about every currency is FIAT these days. All flawed in their own ways. Abused by their govts.

So, it’s really a matter of chosing the lessor evil.

[peterb]

If in fact the US does spend ~20% of its income on servicing the debt, then that seems like a pretty sustainable DTI ratio.
Just about every currency is FIAT these days. All flawed in their own ways. Abused by their govts.

So, it’s really a matter of chosing the lessor evil.

[peterb]

If in fact the US does spend ~20% of its income on servicing the debt, then that seems like a pretty sustainable DTI ratio.
Just about every currency is FIAT these days. All flawed in their own ways. Abused by their govts.

So, it’s really a matter of chosing the lessor evil.

[peterb]

If in fact the US does spend ~20% of its income on servicing the debt, then that seems like a pretty sustainable DTI ratio.
Just about every currency is FIAT these days. All flawed in their own ways. Abused by their govts.

So, it’s really a matter of chosing the lessor evil.

[peterb]

If in fact the US does spend ~20% of its income on servicing the debt, then that seems like a pretty sustainable DTI ratio.
Just about every currency is FIAT these days. All flawed in their own ways. Abused by their govts.

So, it’s really a matter of chosing the lessor evil.

[underdose]

“Sorry, that’s a load of B.S. They are probably counting cumulative Social Security and Medicare payments to be made over the next 100 years …”

Yes, that does count Social Security and Medicare, and it is correct to do so (and dishonest not to). Here’s why:

Let’s say you are 35 years old and you purchase from the government a 30 year treasury for $1000. When you reach 65, the government has an obligation to pay you back the $1000. The way the government reports things today is that the $1000 cash you paid is “revenue”, and the future obligation to pay back $1000 is a “liability”. That $1000 liability gets added to the national debt, and reported as part of the nearly $10 trillion that the government must pay in the future. Makes sense, right?

Let’s say you are still 35 years old and the government withholds $1000 from your paycheck for social security. When you reach 65, the government has an obligation to pay you back the $1000 in the form of social security benefits. The way the government reports things today, the $1000 you pay today is revenue, but the $1000 future obligation is not reported as a liability. That $1000 is not added to the national debt. Does this make sense? No, it is completely dishonest. Arguably, it’s a form of accounting fraud a la Enron. The funny thing is, this shadowstats guy gets his GAAP prepared balance sheet from Bush’s treasury department. So really, it isn’t complete fraud because they are reporting this ugly fact, they are just saying “pay no attention to the man behind the curtain” and pushing the dishonest number as the preferred measure.

And the next 100 years? I have bad news for you. A large portion of this is owed to baby boomers, the first of whom turn 65 in 2010. These unfunded obligations are “maturing” very soon.

And finally, let’s not stray from the point. It is not evil for the government to offer care for retirees if it can legitimately provide it. However, it is evil to make promises it can’t keep, understate its obligations to promote misplaced confidence, and debase the currency to effectively default on its obligations. That’s the real point here.

[underdose]

“Sorry, that’s a load of B.S. They are probably counting cumulative Social Security and Medicare payments to be made over the next 100 years …”

Yes, that does count Social Security and Medicare, and it is correct to do so (and dishonest not to). Here’s why:

Let’s say you are 35 years old and you purchase from the government a 30 year treasury for $1000. When you reach 65, the government has an obligation to pay you back the $1000. The way the government reports things today is that the $1000 cash you paid is “revenue”, and the future obligation to pay back $1000 is a “liability”. That $1000 liability gets added to the national debt, and reported as part of the nearly $10 trillion that the government must pay in the future. Makes sense, right?

Let’s say you are still 35 years old and the government withholds $1000 from your paycheck for social security. When you reach 65, the government has an obligation to pay you back the $1000 in the form of social security benefits. The way the government reports things today, the $1000 you pay today is revenue, but the $1000 future obligation is not reported as a liability. That $1000 is not added to the national debt. Does this make sense? No, it is completely dishonest. Arguably, it’s a form of accounting fraud a la Enron. The funny thing is, this shadowstats guy gets his GAAP prepared balance sheet from Bush’s treasury department. So really, it isn’t complete fraud because they are reporting this ugly fact, they are just saying “pay no attention to the man behind the curtain” and pushing the dishonest number as the preferred measure.

And the next 100 years? I have bad news for you. A large portion of this is owed to baby boomers, the first of whom turn 65 in 2010. These unfunded obligations are “maturing” very soon.

And finally, let’s not stray from the point. It is not evil for the government to offer care for retirees if it can legitimately provide it. However, it is evil to make promises it can’t keep, understate its obligations to promote misplaced confidence, and debase the currency to effectively default on its obligations. That’s the real point here.

[underdose]

“Sorry, that’s a load of B.S. They are probably counting cumulative Social Security and Medicare payments to be made over the next 100 years …”

Yes, that does count Social Security and Medicare, and it is correct to do so (and dishonest not to). Here’s why:

Let’s say you are 35 years old and you purchase from the government a 30 year treasury for $1000. When you reach 65, the government has an obligation to pay you back the $1000. The way the government reports things today is that the $1000 cash you paid is “revenue”, and the future obligation to pay back $1000 is a “liability”. That $1000 liability gets added to the national debt, and reported as part of the nearly $10 trillion that the government must pay in the future. Makes sense, right?

Let’s say you are still 35 years old and the government withholds $1000 from your paycheck for social security. When you reach 65, the government has an obligation to pay you back the $1000 in the form of social security benefits. The way the government reports things today, the $1000 you pay today is revenue, but the $1000 future obligation is not reported as a liability. That $1000 is not added to the national debt. Does this make sense? No, it is completely dishonest. Arguably, it’s a form of accounting fraud a la Enron. The funny thing is, this shadowstats guy gets his GAAP prepared balance sheet from Bush’s treasury department. So really, it isn’t complete fraud because they are reporting this ugly fact, they are just saying “pay no attention to the man behind the curtain” and pushing the dishonest number as the preferred measure.

And the next 100 years? I have bad news for you. A large portion of this is owed to baby boomers, the first of whom turn 65 in 2010. These unfunded obligations are “maturing” very soon.

And finally, let’s not stray from the point. It is not evil for the government to offer care for retirees if it can legitimately provide it. However, it is evil to make promises it can’t keep, understate its obligations to promote misplaced confidence, and debase the currency to effectively default on its obligations. That’s the real point here.

[underdose]

“Sorry, that’s a load of B.S. They are probably counting cumulative Social Security and Medicare payments to be made over the next 100 years …”

Yes, that does count Social Security and Medicare, and it is correct to do so (and dishonest not to). Here’s why:

Let’s say you are 35 years old and you purchase from the government a 30 year treasury for $1000. When you reach 65, the government has an obligation to pay you back the $1000. The way the government reports things today is that the $1000 cash you paid is “revenue”, and the future obligation to pay back $1000 is a “liability”. That $1000 liability gets added to the national debt, and reported as part of the nearly $10 trillion that the government must pay in the future. Makes sense, right?

Let’s say you are still 35 years old and the government withholds $1000 from your paycheck for social security. When you reach 65, the government has an obligation to pay you back the $1000 in the form of social security benefits. The way the government reports things today, the $1000 you pay today is revenue, but the $1000 future obligation is not reported as a liability. That $1000 is not added to the national debt. Does this make sense? No, it is completely dishonest. Arguably, it’s a form of accounting fraud a la Enron. The funny thing is, this shadowstats guy gets his GAAP prepared balance sheet from Bush’s treasury department. So really, it isn’t complete fraud because they are reporting this ugly fact, they are just saying “pay no attention to the man behind the curtain” and pushing the dishonest number as the preferred measure.

And the next 100 years? I have bad news for you. A large portion of this is owed to baby boomers, the first of whom turn 65 in 2010. These unfunded obligations are “maturing” very soon.

And finally, let’s not stray from the point. It is not evil for the government to offer care for retirees if it can legitimately provide it. However, it is evil to make promises it can’t keep, understate its obligations to promote misplaced confidence, and debase the currency to effectively default on its obligations. That’s the real point here.

[underdose]

“Sorry, that’s a load of B.S. They are probably counting cumulative Social Security and Medicare payments to be made over the next 100 years …”

Yes, that does count Social Security and Medicare, and it is correct to do so (and dishonest not to). Here’s why:

Let’s say you are 35 years old and you purchase from the government a 30 year treasury for $1000. When you reach 65, the government has an obligation to pay you back the $1000. The way the government reports things today is that the $1000 cash you paid is “revenue”, and the future obligation to pay back $1000 is a “liability”. That $1000 liability gets added to the national debt, and reported as part of the nearly $10 trillion that the government must pay in the future. Makes sense, right?

Let’s say you are still 35 years old and the government withholds $1000 from your paycheck for social security. When you reach 65, the government has an obligation to pay you back the $1000 in the form of social security benefits. The way the government reports things today, the $1000 you pay today is revenue, but the $1000 future obligation is not reported as a liability. That $1000 is not added to the national debt. Does this make sense? No, it is completely dishonest. Arguably, it’s a form of accounting fraud a la Enron. The funny thing is, this shadowstats guy gets his GAAP prepared balance sheet from Bush’s treasury department. So really, it isn’t complete fraud because they are reporting this ugly fact, they are just saying “pay no attention to the man behind the curtain” and pushing the dishonest number as the preferred measure.

And the next 100 years? I have bad news for you. A large portion of this is owed to baby boomers, the first of whom turn 65 in 2010. These unfunded obligations are “maturing” very soon.

And finally, let’s not stray from the point. It is not evil for the government to offer care for retirees if it can legitimately provide it. However, it is evil to make promises it can’t keep, understate its obligations to promote misplaced confidence, and debase the currency to effectively default on its obligations. That’s the real point here.

[Eugene]

Let’s say that I lease an apartment for $1000/month and I intend to continue leasing it for the next 100 years and pay as I go, out of my future earnings. Does it mean that I have $1000 * 12 * 100 = $1.2 million in debt?

the $1000 you pay today is revenue, but the $1000 future obligation is not reported as a liability. That $1000 is not added to the national debt.

$1000 I pay today is reported as revenue, $1000 paid to current retirees is reported as expense. Sounds fair to me.

[Eugene]

Let’s say that I lease an apartment for $1000/month and I intend to continue leasing it for the next 100 years and pay as I go, out of my future earnings. Does it mean that I have $1000 * 12 * 100 = $1.2 million in debt?

the $1000 you pay today is revenue, but the $1000 future obligation is not reported as a liability. That $1000 is not added to the national debt.

$1000 I pay today is reported as revenue, $1000 paid to current retirees is reported as expense. Sounds fair to me.

[Eugene]

Let’s say that I lease an apartment for $1000/month and I intend to continue leasing it for the next 100 years and pay as I go, out of my future earnings. Does it mean that I have $1000 * 12 * 100 = $1.2 million in debt?

the $1000 you pay today is revenue, but the $1000 future obligation is not reported as a liability. That $1000 is not added to the national debt.

$1000 I pay today is reported as revenue, $1000 paid to current retirees is reported as expense. Sounds fair to me.

[Eugene]

Let’s say that I lease an apartment for $1000/month and I intend to continue leasing it for the next 100 years and pay as I go, out of my future earnings. Does it mean that I have $1000 * 12 * 100 = $1.2 million in debt?

the $1000 you pay today is revenue, but the $1000 future obligation is not reported as a liability. That $1000 is not added to the national debt.

$1000 I pay today is reported as revenue, $1000 paid to current retirees is reported as expense. Sounds fair to me.

[Author]

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