Chart J shows the Treasure Department's estimates for debt held by the public for the next 75 years. It looks like they are expecting a debt to GDP ratio of more than 700 percent by that time.
Chart K shows tax revenue increasing at a gradual rate while total spending continues on a very steep curve until it makes up more than 40 percent of GDP.
These two charts are extremely scary. Here is what the Treasury Department said about it (highlights added):
"While the economy is still fragile and in need of careful attention, there is wide
agreement on the need to look not only at the near-term but also at steps that begin to
change the long-term fiscal path as soon as possible without slowing the economy. As
discussed in the 2010 Financial Report, the federal government is on an unsustainable
long-term fiscal path driven on the spending side primarily by rising health care costs and
known demographic trends. Under new financial reporting standards, this 2010 Financial
Report includes comprehensive long-term fiscal projections for the U.S. government,
expanding on similar information presented in recent years’ financial reports. The
projections show that the present value of projected non-interest spending exceeds
receipts by about $16.3 trillion over the next 75-year period. The projections relating to
Social Security and Medicare are based on the same assumptions underlying the
information presented in the Statement of Social Insurance and assume reductions in
Medicare cost growth. GAO also prepares long-term simulations for all federal
government programs. Under GAO’s Alternative simulation, absent policy change, by
2020 roughly 92 cents of every dollar of federal revenue would be spent on net interest
costs, Social Security, Medicare, and Medicaid; and debt held by the public as a share of
gross domestic product (GDP) would by 2020 exceed the historical high reached in the
aftermath of World War II. The federal government faces increasing pressures, yet a
shrinking window of opportunity, for making policy changes regarding these challenges."
Now take a look at this chart:
Here is an excerpt from the report:
"The sums are shown in the last line of the table (also equivalent to adding the values in the second and fifth lines). The total resources needed for all the programs sums to $77.9 trillion in present value terms. This need can be satisfied only through increased borrowing, higher taxes, reduced program spending, or some combination.”
It is obvious that we have a BIG problem in Washington. The government is bloated and struggling to get approval to allow them to continue to do things the way they have been doing them for the last several years. The striking issue that I see is that there is no possible way for our economy to continue to grow when the government is planning to add TRILLIONS of dollars of burden to our personal budgets. These charts and quotes have come directly from government reports and you can bet that the president has read them. Our economy isn't strong enough to continue with these levels of debt. Government needs to get smaller and more efficient. The data point that makes me the most nervous is the fact that we need $77.9 trillion in current funds in order to fund all of our liabilities for the next 75 years, and that is under the assumption that the cost of Medicare goes down.
Our politicians in Washington have ignored that $77.9 trillion in all of the recent debates. They only want to talk about the $14.2 trillion that we have in publicly funded debt. This publicly funded liability is only a drop in the bucket for what our country is obligated to come up with during the rest of my life.
Also, the report that I read explicitly excludes liabilities to these organizations: AIG, AMTRAK, The Federal Reserve, CitiGroup, Freddie Mac, Fannie Mae, GMAC, Sallie Mae, and more. What a mess! It is obvious to me that someone needs to pull the emergency brake. Stop spending. Let the economy and the government shrink and shake out the artificial support. We shouldn't be talking about simply slowing the rate of growth of spending, we need to REDUCE spending until our government can learn to live within a budget.
All of my data can be verified here: http://goo.gl/SF1UE