Over the last few year, the figures the government has been releasing on the budget deficits has been far underreported. What they did was took out the interest that the massive Social Security and Medicare trust funds earned on money kept in bonds… for instance if the deficit was going to be $400 billion they subtracted out the $200 billion in interest payments. However, no money actually changed hands; this is just money that the government owes itself. This is an accounting scandal far worse than Enron or Worldcom or Healthsouth. Politicians have deliberately hidden the numbers this way because both major parties have had a hand in creating this issue. For the last two years, the government has been operating at a major CASH deficit- if the government was a business it would be teetering at the edge of bankruptcy. The Social Security Administration, at current rates, is expected to collapse in six to nine years. Americans are facing economic collapse on an unprecedented scale. This will make Black Tuesday and the start of the Great Depression look like a mild downturn. I recommend getting your investments out of cash and into property and foreign mutual funds. No one can predict precisely when the economy will crash (except the Chinese; when they stop investing in U.S. bonds the crash will probably begin), so you should start to protect yourself now. Cash is the worst investment, U.S. stocks the second worst. Soon, I am going to start to short sell U.S. stocks and maybe make a little money when the market crashes.
|Fiscal year||Reported surplus/deficit||Debt increase||Debt at start of year||Debt at year’s end|
|2000||$236.2 billion surplus||$23.2 billion||$5.606 trillion||$5.629 trillion|
|2001||$128.2 billion surplus||$141.2 billion||$5.629 trillion||$5.770 trillion|
|2002||$157.8 billion deficit||$428.5 billion||$5.770 trillion||$6.198 trillion|
|2003||$377.6 billion deficit||$561.6 billion||$6.198 trillion||$6.760 trillion|
|2004||$412.7 billion deficit||$594.7 billion||$6.760 trillion||$7.355 trillion|
|2005||$318.3 billion deficit||$550.6 billion||$7.355 trillion||$7.905 trillion|
|2006||$248.2 billion deficit||$546.1 billion||$7.905 trillion||$8.451 trillion|
|2007||$162.8 billion deficit||$497.1 billion||$8.451 trillion||$8.949 trillion|
As of today, the U.S. federal deficit is over $9.1 trillion. That is $30,000 for every man, woman and child living in the United States. It also doesn’t take into account the $2 trillion in debt owed by states and cities. Or the $2.2 trillion owed by consumers. Or the trillions owed by American corporations.
The previous generations of Americans (those from WW1 up till today’s big spenders) have lived large and their debt will be called in soon and my generation and the next generations of Americans will have to pay up.