The $53 Trillion Asteroid

I like watching Glenn Beck and so does my wife. But Glenn can put together a pretty good column too. Lately, he takes on Social Secuirty and laments how everyone knows it is going to go belly-up but no one seems to want to fix it.

As an analogy, Glenn uses an asteroid strike. We know the asteroid is getting closer and closer, but because the actual impact is so many years in the future, everyone assumes a future government will take care of it. Apparently, our government has the same attitude towards the Social Security crisis.

From Glenn’s column:

Let me give you three numbers that will put this economic asteroid into perspective: $200 billion, $14.1 trillion, and $53 trillion.

– $200 billion is the approximate total amount of write-downs announced so far as a result of the current credit crisis.

– $14.1 trillion is the size of the entire U.S. economy

– And $53 trillion is (drum roll please) the approximate size of this country’s bill for the Social Security and Medicare promises we’ve made.

While no one will ever mistake me for Alan Greenspan, it seems to me that the third number is quite a bit larger than the other two. It also seems very few people care.

According to the latest Social Security and Medicare Trustees report (and I use that term loosely since it has the word “trust” in it) released earlier this week, the economic asteroid will first make impact in the year 2019 when the Medicaid trust fund becomes insolvent.

Let’s see, that is a little over ten years away. So what are the plans for dealing with this? Nothing, so far.

More:

Realizing that Americans have become pretty much numb to these kinds of ridiculous sounding proposals, U.S. Treasury Secretary Henry Paulson tried to up the ante this week. “Without change,” he said, “Rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues, and threaten America’s future prosperity.”

Now, I know we’re all worried about important sounding things that none of us understand, like CDO’s, SIV’s, and Credit Default Swaps, but did you hear what our Treasury Secretary just said?

“Rising costs will … consume nearly all projected federal revenues …”

Translation: Every single tax dollar that is sent to Washington will be used to pay for just these two programs.

That means no money is left for anything else. Nothing. No Department of Defense or Homeland Security, no Department of Energy, no Department of Justice, no Environmental Protection Agency, no Internal Revenue Service. Actually, knowing our government, they’d probably keep the IRS going somehow.

It seems pretty clear that Social Security is going to go under and it is threatening to drag the entire U.S. economy down with it. Either we need to seriously reform it (perhaps personal, private retirement accounts) or do away with it altogether by phasing it out.

You can access the complete column on-line here:

The $53 Trillion Asteroid
Glenn Beck
CNN.com
March 14, 2008

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