Is the United States on a Fiscally Unsustainable Path?

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Pg 19 of the 2012 Finance Report of the U.S. Govt

On February 9th, 2013, I will be hosting an indepth interview with Bob Williams, President of “State Budget Solutions,” and former founder of the “Freedom Foundation.”

Bob Williams, has spent much of his life as an advocate for; fiscal sustainability, the protection of individual liberty, and the free market principles envisioned by the Founders of our Country. Bob has followed Federal and State spending, for decades and is well versed in the day-to-day actions of politics and politicians.

As you can see by looking at the graph to your left, the United States is not only on an unsustainable fiscal path, we have huge potential to fail as a country if/when interest rates rise due to inflation. The only reason our interest rates have not skyrocketed right now, is due to the fact that many of the everyday items we consume with disposable income are not counted. Also, the Federal Government does not include our long term obligation to Social Security and Medicare. These actions promote a false sense of security that the debt crisis is no big deal. It is a big deal. The long term debt to both these line items; increases the U.S. Federal Debt by more than $38.5T. That’s not chump change!

Bob has a lot of common sense cures to resolve the current revenue crisis of the Country like; the removal of $261B in unauthorized Federal spending, the removal of $788B in expiring/expired authorized programs, and the enforcement that there be no spending without the consent and approval of the House. In addition, Bob and I will discuss the effects of continuing resolutions (CR) and the big secret, that both parties will not bring up a Point of Order on spending forunauthorized and expiring-authorized programs; costing We the People, billions of our hard earned dollars.

~ Kris Halterman

Graphs below are from the 2012 Financial Report of the United States Government:
Table 8 summarizes amounts reported in the SOSI, showing that net social insurance expenditures are projected to be $38.6 trillion as of January 1, 2012 for the “Open Group,” an increase of $4.8 trillion over net expenditures of $33.8 trillion projected in the 2011 Report.29 Table 9 summarizes the principal reasons for the changes in projected social insurance amounts during 2012 and 2011. Most of the change from the past year is attributable to the change in the valuation period, and economic data and assumptions (e.g., health care costs, taxable earnings, price inflation, and real interest rates). For both the Old-Age, Survivors, and Disability Insurance (OASDI or Social Security) programs administered by the Social Security Administration (SSA), and the Medicare Part A (Hospital Insurance) program, administered by the Department of Health and Human Services (HHS) , as of the current valuation period (January 1, 2011 – January 1, 2012): (1) taxable earnings are lower for the starting year than projected for the prior valuation period; (2) price inflation was higher than expected, with the cost of living adjustment in December 2011 being higher than assumed in the prior valuation, and (3) the real interest rate is projected to be lower over the first ten years. These changes decrease the present value of future cashflows.30 The effects of these changes on HHS are reported separately in Table 9, as HHS also includes the effect of specific healthcare assumptions in this category, including but not limited to anticipated effects of the ACA, and growth assumptions for inpatient hospitals and hospice services.

Table 8, located on pg. 25, of the Financial Report of the U.S. Governmentt.
Table 8, located on pg. 25, of the Financial Report of the U.S. Governmentt.
Table 9, located on pg. 41, of the Financial Report of the U.S. Governmentt.
Table 9, located on pg. 41, of the Financial Report of the U.S. Governmentt.

 

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