Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (46600)	12/4/2005 3:41:26 PM
From: CalculatedRisk	Read Replies (4) \| Respond to of 110194

Les, great question and I've thought about taking a shot at it. Using consistent time frame and methodology, the GAO calculated (see page 50): gao.gov Future Social Security benefit payments ($3,699) Future Medicare Part A benefit payments ($8,236) Future Medicare Part B benefit payments ($11,416) Future Medicare Part D benefit payments ($8,119) (dollars in billions) So future Medicare liability dwarfs SS. For those that want to change the assumptions and timeframes for SS, they should make the same assumptions for Medicare ... But the BIGGEST problem is probably the General Fund deficit and the associated interest payments. In fiscal 2006, interest payments are set to increase significantly (mostly due to higher interest rates, but also because the total debt has been increasing rapidly). See figure 2 here: calculatedrisk.blogspot.com With the General Fund deficit running over $500 Billion per year and projected to grow substantially in a few years - the liability from the deficit and the associated interest will even dwarf medicare! My initial guess is something like $75 Trillion when doing an apple to apple comparison to Medicare. Of course most of the deficit is from tax cuts - not spending increases. See Dr. Kash's post today (he uses the optimistic Bush projections for the next 5 years): angrybear.blogspot.com The American people should demand two things: 1) fiscal responsibility (bring the General Fund deficit back into line), and 2) real health care reform. Its a National tragedy that America has the most expensive health care system and some of the worst outcomes of 1st world countries. The fiscal debate should be focused on these two areas: Health care and the General Fund deficit. "Fixing" SS while ignoring the real problems is like painting the porch while the house burns down. Best Regards. Sorry for the ramble ...

To: Les H who wrote (46600)	12/7/2005 2:57:18 AM
From: ahhaha	Respond to of 110194

Has anyone made a stab at an estimate of the unfunded liability for the interest on the national debt, I'll make a stab at it. The unfunded liability is zero since interest can't be an unfunded liability. Interest has priority and must be paid out of receipts. Otherwise, the lender would default and in this case the lender is the US government. Before that happened the IRS would make YOU pay. Modern government is merely a redistribution scheme that figures out who is worthy and who isn't. To become worthy one only needs to get left and get the 666 tattoo on the forehead.