There was big news on the national debt recently. We’ve seen the debt pass the 14 trillion dollar mark in the United States for the first time. It is a staggering number, but what does it all actually mean? If you’re thinking about understanding those numbers all you have to do is break the numbers down.
The first factor to understand will be the $14 trillion dollar debt figure can be a blatant misrepresentation. You possibly had been already thinking it couldn’t be that high. Nicely, the bad news will be the number truly represents a fraction of what we truly face. How can this be? Easy, the government just does not count specific debts. It calls these "unfunded liabilities". It’s somewhat like tallying your net worth, but without having counting the mortgage on your residence as a debt. Any private citizen or company that used this special accounting approach would wind up in prison, of course, but not our lovely government!
So, just what are the tough numbers nowadays? So, if you wish to know the actual figure of the national debt as of January 8, 2011 is $14,017,034,000,000. But this figure is just a little amount or fraction of the total debt. Total unfunded liabilities are $112 trillion. Yes, about 9 times the official debt figure. These unfunded liabilities breakdown as roughly $14 trillion owed on social security, $19 trillion on the prescription drug program [thanks President Bush!] and $77 trillion on Medicare. As well as the other million dollars was truly shared by each and every American. Please send in your check nowadays!
The numbers are so large it is truly hard to even grasp them. Let’s see if we can try an approach that might help detail the issue we face. The national debt was just over $5 trillion dollars in the year 2000. In just ten years this $5 trillion national debt had been triple. Let’s take a look at our own financial situation. Could you afford to triple your debt? Most likely not and neither can we.
The national debt is much like credit card debt. Most of individuals have it, yet doesn’t wish to speak about it, and all of us are conscious that this credit card debt will eat us alive if we’re going to ignore it. The reality we have officially passed the $14 trillion dollar debt mark isn’t great news, but things are even worse when you regarded as unfunded liabilities.
What will the remedy be? At this point, no one appears to have an idea. And that can be the scariest factor that we will ever face in the next couple of years to come.
