The U.S.A. is Out of Money

Michele Bachmann | August 12, 2009 10:41 AM

I came across a great piece (albeit a very troubling one) in the Washington Times on Tuesday detailing why our nation needs to rein in our overspending because "the United States is functionally bankrupt.”

And this column doesn’t even take into account that a trillion-dollar overhaul of our health care system continues to remain a very real possibility.

This is real money we're talking about here, and real people’s futures. To assume that we can spend as much as we like with little or no repercussions is flat out wrong and irresponsible. I encourage you to take a couple of minutes and give the piece a read. We can no longer afford to pass our financial burdens off to future generations.

"The United States is functionally bankrupt. Our collective capacity to deal with this astonishing fact is seemingly nonexistent. Our national politics have become show business, exhibiting a complete refusal to strategically respond to this reality.

"Let's look at the simple numbers of our national debt. Our on-the-books national debt is $11.6 trillion. But off-the-books federal debt, including Medicare and Social Security, is $107 trillion. This is not a made-up number; this is the money we should have in the bank, according to the federal government's own accountants, to pay for our current promises to our retirees and future retirees, and this doesn't include unfunded obligations that we have to the pensions and benefits promised to federal workers and veterans. Nor does it include huge unfunded pension and benefit obligations for other public employees at levels below the federal government.

"But let's just add the $11 trillion to the $107 trillion, and we get $118 trillion. These are big numbers but still just fifth-grade math. Now our total annual national output, or gross domestic product (GDP), is about $14.3 trillion. Total federal receipts, or income if stated in business terms, are about $2.5 trillion. This means that our debt to federal income ratio is about 47, and that ratio assumes that the federal revenues are free to retire the obligations, which they are not. We must pay for defense and a myriad of other programs. Again, in business terms, there is no free cash flow to pay these massive obligations.”