The 2009 Financial Report Of The U.S. Government has finally been released, and the news is not good. It basically confirms much of what we already know – that the United States government is a complete financial mess. The U.S. government budget deficit for 2009 was a record-setting 1.417 trillion dollars. The total liabilities of the U.S. government rose from 12.178 trillion dollars at the end of 2008 to 14.123 trillion dollars by the end of 2009. At their present rates of growth, the interest on the national debt and spending on entitlement programs will gobble up almost every single dollar of federal revenue by the end of the decade.
Throughout the report, the word “unsustainable” is repeatedly used. The authors of the report understand that the U.S. government simply cannot keep spending and borrowing like it has been recently. But if the U.S. government slows down this reckless spending even a little bit it could literally plunge the U.S. economy into a deflationary depression. In fact, even with all of the “bailouts” and “stimulus packages” there are many who would argue that we are already in a depression. In any event, the authors of the report make it clear the United States government is facing a financial crisis of unprecedented magnitude.Just consider the following chart below. This chart comes straight out of the 2009 Financial Report Of The U.S. Government, and it shows how explosively federal deficits have grown in recent years….
The reality is that deficits of three or four hundred billion dollars per year were catastrophic enough.
But a deficit of 1.4 trillion?
That is national financial suicide.
In fact, the chart below from the White House Office of Management and Budget shows just how dire the financial position of the U.S. government has become. The government has dramatically increased spending at a time when government revenues are actually falling….
But this was supposed to be a time when the federal government would be running surpluses to prepare for the massive growth in entitlement spending that everyone knew would come when the Baby Boomers retire.
But that is not happening.
Instead we are already running record-setting deficits.
So what is causing these deficits?
Rampant, out of control spending. Just check out this chart of federal net outlays….
What would happen to your own personal finances if your household spending kept increasing like that?
But things are not going to get any better any time soon.
As interest on the national debt piles up and as spending on Social Security and Medicare explodes it will be extremely difficult to control the U.S. federal budget deficit.
The report projects that the rapidly growing interest costs on the national debt together with spending on major entitlement programs will absorb approximately 92 cents of every dollar of federal revenue by 2019.
That is before anything is spent on defense, education, homeland security, job creation or anything else.
In particular, the growth of interest on the national debt promises to absolutely crush U.S. government finances if something is not done. Just consider the following chart pulled right out of the report….
Take a moment and let the implications of that chart sink in.
Are you prepared to saddle future generations with interest payments that gobble up 30 percent of GDP?
But wait, there’s more.
According to the report, the present value of projected scheduled benefits exceeds earmarked revenues for social insurance programs such as Social Security and Medicare by about $46 trillion over the next 75 years.
So either the U.S. government is going to have to radically cut back Social Security and Medicare benefits or they will have to come up with tens of trillions of extra dollars from somewhere.
And remember, the 46 trillion dollar figure is just the “present value” of those future payments.
Because of inflation, the actual value of those future payments will be far, far, far greater.
In a section about Social Security and Medicare, the authors of the report freely admitted that “it is apparent that these programs are on a fiscally unsustainable path”.
Well, can’t we just “grow” our way out of these problems?
The truth is that the U.S. economy is caught in an economic death spiral.
Sometimes words just cannot express how bad things have gotten.
Sometimes it takes charts.
The following chart shows changes in our national income since 1950….
This next chart shows changes in our exports of goods and services since about 1930….
Are you starting to get the picture?
America’s economic goose is cooked.
We are drowning in a sea of debt at the same time our once mighty economic machine is sputtering to a stop.
Meanwhile, the financial powers that be are not about to let a good crisis go to waste. Just like during the Great Depression, the sharks are using hard times as an excuse to gobble up the smaller, weaker fish. In fact, there are persistent whispers that the financial elite see this current economic crisis as the perfect opportunity to consolidate the U.S. banking industry.
In any event, it does not look like things are going to get back to “normal” for most of us any time soon.
Lastly, one interesting tidbit in the 2009 Financial Report Of The U.S. Government can be found in footnote 2 on page vii of the report. In that footnote it tells us why the financial results for the Federal Reserve are not included in the report….
The Federal Reserve is an independent organization and not considered a part of the Federal reporting entity. As such, their financial results are not consolidated into the Government’s financial statements.
Anyone have any comments? Quelle: theeconomiccollapse
some comments taken from there:
Joe March 4th, 2010 at 3:36 pm
I agree with all of your points, however, your graphs don’t take inflation into account and are therefore almost meaningless. Why bother including graphs like this? You don’t need to make the graphs scarier by ignoring inflation, they are already ridiculous enough.
cheryl March 4th, 2010 at 3:39 pm
This is being done purposely. Our country was doomed when it was taken off the gold standard by Woodrow Wilson in 1913 giving over our country’s wealth to privately owned bankers. They created the Federal Reserve to make it seem they were part of our government, but they aren’t. They’re criminal banking families who fund both sides of wars to profit from. They are the reason our country is in this terrible situation. Our money was never backed by anything, they print it out from thin air! It has no real value anymore and our country is going to fall into a world government, as they planned, very soon. They have concentration FEMA camp waiting for us after the collapse.
Bildo March 5th, 2010 at 2:40 am
When we talk about “the government”…..
Didn’t I read something about the actual US Gov being done away with around 1861 or so? Apparently, a corporation was formed in it’s place and they copyrighted a bunch of terms such as US, US CITIZEN, UNITED STATES GOVERNMENT,etc…..?
From what I understand that corporation went bankrupt in 1933[yr?] and was taken over by it’s creditors.
Such a shame that so many people don’t know where the money actually comes from and that faucet will soon be turned off.
rrbit March 5th, 2010 at 3:35 am
One simple solution would be to nationalize the Federal Reserve.
Right now we are giving banks money and then borrowing it back at interest. What kind of idiot does this??
Richard M. Connelly March 5th, 2010 at 5:03 am
Yes, I have a comment. All this “lamebrain” talk by Homeland Security about “Domestic Terrorists” should begin with our polticians and bankster members of the banking cartel. THEY are DOMESTIC TERRORISTS of the first order…..they gave us economic “shock and awe” alright and have committed a heineous crimes against the American People. If ever the American People regain control of our country politically we need to try many of these criminals for what they have done. They have ruined us totally and absolutely. What a filthy,lying bunch of self serving, elitist vermin! TREASON and LOOTING on a GRAND SCALE!
Tex March 5th, 2010 at 5:48 am
instead of getting rid of Social Security and Medicare benefits how about getting rid of law enforcement and FEMA camps?
Randy March 5th, 2010 at 5:10 pm
Mae is right. A scholar from the New School of Social Research in New York City has already suggested to Congress that IRAs and 401Ks should be nationalized. The Thrift Savings Plan would be the first to go as that is the plan federal employees pay into for their retirement. Congress loots that plan for spending money on a regular basis even now. After I left federal service, I got my money out and am withdrawing it and converting it into silver to make it harder for the US GOV to steal to pay off all their bad debts. If this was not enough, the fact that we are faced with huge unfunded entitlements and have lost most of our manufacturing base to globalization (only 9% is left) will make it very difficult if not impossible to meet these obligations. Coupled with ever rising costs of oil exploration / exploitation and the depletion of existing fields, it is unlikely that things will improve in the next five years. The best investments now are small grazing farms, draft animals, the means to feed/water/cloth and shelter yourselves. Silver is another good bet, and don’t forget a good shotgun, dog and fences.
Ted March 5th, 2010 at 5:36 pm
American’s been in decline for awhile now, and that’s why, in September of 2000, those sociopathic neo-cons at PNAC (Project for a New American Century) called for a “Pearl Harbor-type event” to help ramp up American military presence/dominance worldwide.
It was in their document called “Rebuilding America’s Defenses”–it’s completely real, go look it up.
They knew they had to sit on Middle Eastern oil fields and gain control of the spigot, so to speak, if they had any hope of remaining the global superpower. They also knew that American citizens wouldn’t accept these illegal, immoral wars of conquest without a good excuse—-hence the “terrorist” attacks of 9/11, conveniently occurring one year to the month after PNAC day-dreamed about a “Pearl Harbor-type event” that would catalyze the changes they wanted.
Well, this brute military force is about all the strength America has left, so expect to see the U.S. start World War 3 before long.
Dave March 5th, 2010 at 6:40 pm
It would be one thing to say that we are following the path of other failed,collapsed nations,but it’s worse than that.
We are much further in debt than any other in history at the same time we are about to have our currency overthrown as the global standard. Our “readjustment” will most likely be one of the hardest and most painful in history-aside from the devastations to countries that result from wars….which brings up the other potential…