We’ve become aware, over the past few months, of some of the debt we’ve accumulated on the Federal level (there is some that hasn’t been widely talked about: the $6.3 trillion of liabilities belonging to Freddie Mac and Fannie Mae, putting our total current debt at around $19 trillion), but many of us are still unaware of the massive unfunded liabilities that are threatening our Federal, state and local governments; liabilities that almost make the national debt look like pocket change (unfunded liabilities are promises made -usually pensions - for which money has not been set aside).
The Social Security and Medicare Trustees report that the
programs have $107 trillion in unfunded liabilities. The unfunded pension
liabilities of the 50 states are estimated to be around $1 trillion (though
some think three times that number is more accurate), and local governments are
not immune to the problem.
The City of St. Louis has seen its pension costs shoot from
$7 million in 2000 to $61 million this year, with the projection for next year
to be $72 million (the city’s solution is to borrow money by issuing bonds and
to increase the sales tax).
San Diego has unfunded liability estimated at $2.7 billion
as of this past November. Atlanta has $1.5 billion in unfunded liability.
Pittsburgh has a $600 million shortfall and Omaha $500 million. There are
undoubtedly many more examples out there of government entities, large and
small, which need to raise more revenue (much more) to meet their obligations.
Can you say “tax increases for the middle class?”
On top of all this (gee, I hate to sound so negative, but
I’m afraid it’s true), we have not yet seen the end of the mortgage foreclosure
crisis (there are a lot of homeowners just barely hanging on) nor the middle of
the commercial loan crisis; there’s an estimated $3.4 trillion in commercial
loans outstanding and a lot of them are in trouble. Employment is not
increasing, new jobs are not being created and we just added to the burden with
a national health care bill. We are headed for a world of hurt, and it’s not
too far away!
So what can we do about it? How are we going to deal with
this situation? It’s easy to see that some benefits will have to be cut,
general spending will have to go down, and new sources of revenue will have to
be raised, all at a time when most of us are having a lot of trouble keeping
our heads above water! The first thing we should do, though, is repeal the
health care overhaul. Then we really need to get busy and figure out how we’re
going to manage for the next 30 years or so. It’s time for new talent in D.C.
You can help change things by supporting my congressional
campaign. Visit my campaign site here.
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