The Hard Truth: U.S. Is Broke
by Phil Heimlich
Commentary
I host a weekly radio show on Salem Broadcasting called Hard Truths. A “hard truth” is one we don’t want to hear. The kind we‘re never told by members of Congress or presidential candidates. We heard a lot of hard truths from the Old Testament prophets and Jesus – instead of pandering to us, they confronted us.
Here’s a hard truth: the U.S. is broke. That’s right – we’re broke. There’s no point in debating, as Republicans and Democrats do, about military spending versus social programs – there’s no money left. How about tax cuts for the wealthy versus tax cuts for the middle class, like Obama and McCain are arguing about? Forget it – there’s no money for either one. But I thought that if we cut taxes, that would bring in more revenue? – we’ll talk about that later.
So here is a hard truth, folks. A REALLY hard truth. Our country owes $53 trillion. You and me and your kids and mine – we all owe $53 trillion, and the number keeps getting higher every day. The number is so staggering, it is hard to believe. But here’s how it adds up:
Total Liabilities $11,000,000,000,000
Social Security $7,000,000,000,000
Medicare $34,000,000,000,000
Miscellaneous $1,000,000,000,000
Total $53,000,000,000,000
These figures are provided by David G. Walker, former head of the Government Accountability Office. (In other words, he was chief accountant and auditor of the United States.)
If the zeros lined up above don’t scare you, here’s how the nonpartisan Concord Coalition explains what one trillion dollars is:
“Many people have trouble conceiving just how much money a trillion dollars is. While there are hundreds of billionaires, even the richest amongst them only has assets equaling about 4 or 5% of a trillion dollars.
The census estimates that the current population of the United States is 295,665,981. A trillion dollars is approximately $3,382.19 for every man, woman, and child in our country.
To put it another way, in 2003, the total economic output of only 7 countries was greater than 1 trillion dollars.”
Walker points out that if you do the math, our government owes approximately $175,000 for every person in this country. He says that what makes this scary is that Social Security and Medicare, which account for $41 trillion of what we owe, are compounding – they’re growing by $2 trillion to $3 trillion per year on “autopilot.” Even scarier is that nobody has the slightest idea how to pay this off.
Now back to tax cuts. My fellow conservatives like to say that if we just cut taxes, this will bring in more revenue and take care of this debt. If this were true, there would be joy in the land because we would, in effect, be getting something for nothing. Unfortunately, according to the Center on Budget and Policy Priorities, it is too good to be true:
“Studies by the Congressional Budget Office, the Joint Committee on Taxation, and the (Bush) Administration itself show that tax cuts do not come anywhere close to paying for themselves over the long term... Moreover, in its recent ‘dynamic analysis’ of the impact of making the President’s tax cuts permanent, the Treasury Department reported that even under favorable assumptions, extending the tax cuts … would offset no more than 10 percent of the tax cuts’ cost.
In addition, economists from across the political spectrum — including economists who have held top positions in the current Administration — reject the argument that tax cuts pay for themselves. In tax policy, as in other aspects of policymaking, there is no ‘free lunch.’”
Where did our leaders get the $53 trillion to put us in this hole? They borrowed it – from the Chinese, the Swiss, and anybody else that’ll buy our bonds. How do we pay the interest on these bonds? By borrowing more – just like you and I do when we increase the credit limit on our VISA to pay for the plasma TV that we couldn’t afford in the first place. But what happens when the countries that have been loaning us money to stay afloat decide this country is no longer a great credit risk? As Gerald Swanson says in America the Broke, "…our government will suddenly run out of cash, unable to meet its payments, leaving the United States as bankrupt as any banana republic.”
How did we get in this situation? Very simple – we ignored God’s Word. Proverbs 22:7 says “the borrower is the servant to the lender.” If we had simply balanced our budgets and paid off our bills, we wouldn’t be in this situation. That is the hard truth.
Phil Heimlich is a television commentator and host of the radio show, Hard Truths. To check his availability for speaking engagements, go to:
http://www.heimlichhardtruths.com/contact.htm.
This is not a drill!
Ernest L. Jakes