It is nearly impossible for the average person to comprehend the damage the US government has done to the economy. Regulations have harmed business (and consumers). The welfare state is sapping the energy from the productive sector. Growth is below par and will continue to under-perform in terms of historic norms. The standard of living has slowed and will soon turn negative. Per capita income and wealth are stagnant or down. Unemployment is grossly and deliberately understated. It is difficult for the layman to grasp what has happened or that the future will get worse.
Easier to understand is the debt burden imposed on citizens. The numbers themselves are not comprehensible. Few understand what a billion dollars is. Even fewer have any understanding of what a trillion is. Nevertheless, the rate of deterioration is apparent as these debt numbers accelerate. Regardless of how much you understand, there is one thing that can be stated unequivocally: There is no way out of the debt problem other than massive defaults.
No economic theories or policies are able to avoid this ending. The rules of mathematics now control outcomes.
There is one possible solution which would require immediate and drastic cuts in government spending. Simpson-Bowles $4 Trillion target over a ten-year period is meaningless. It doesn’t alter the spending curve. Cutbacks of a trillion or two every single year, starting today, are required. The budget must be balanced and surpluses generated to have any hope of avoiding sovereign bankruptcy.
No politician is able or willing to address this problem. Attempting to solve the problem would be political suicide for the politician or party that tried. Civil unrest would break out everywhere. Hence we get lip-service or BS solutions which are meaningless. They only extend the game a bit longer while ultimately producing more pain.
To understand the magnitude of the debt, this list from Economic Collapse is useful. Read it to understand the hopelessness of the situation:
#1 It took more than 200 years for the U.S. national debt to reach 1 trillion dollars. In 1986, the U.S. national debt reached 2 trillion dollars. In 1992, the U.S. national debt reached 4 trillion dollars. In 2005, the U.S. national debt doubled again and reached 8 trillion dollars. Now the U.S. national debt is about to cross the 16 trillion dollar mark. How long can this kind of exponential growth go on?
#2 If the average interest rate on U.S. government debt rises to just 7 percent, the U.S. government will find itself spending more than a trillion dollars per year just on interest on the national debt.
#3 If right this moment you went out and started spending one dollar every single second, it would take you more than 31,000 years to spend one trillion dollars.
#4 Since Barack Obama entered the White House, the U.S. national debt has increased by an average of more than $64,000 per taxpayer.
#5 Barack Obama will become the first president to run deficits of more than a trillion dollars during each of his first four years in office.
#6 If you were alive when Jesus Christ was born and you spent one million dollars every single day since that point, you still would not have spent one trillion dollars by now.
#7 The U.S. national debt has increased by more than 1.6 trillion dollars since the Republicans took control of the U.S. House of Representatives. So far, this Congress has added more to the national debt than the first 97 Congresses combined.
#8 During the Obama administration, the U.S. government has accumulated more new debt than it did from the time that George Washington became president to the time that Bill Clinton became president.
#9 If Bill Gates gave every single penny of his fortune to the U.S. government, it would only cover the U.S. budget deficit for 15 days.
#10 As Bill Whittle has shown, you could take every single penny that every American earns above $250,000 and it would only fund about 38 percent of the federal budget.
#11 Today, the government debt to GDP ratio in the United States is well over 100 percent.
#12 A recently revised IMF policy paper entitled “An Analysis of U.S. Fiscal and Generational Imbalances: Who Will Pay and How?” projects that U.S. government debt will rise to about 400 percent of GDP by the year 2050.
#13 The United States already has more government debt per capita than Greece, Portugal, Italy, Ireland or Spain does.
#14 At this point, the United States government is responsible for more than a third of all the government debt in the entire world.
#15 The amount of U.S. government debt held by foreigners is about 5 times larger than it was just a decade ago.
#16 The U.S. national debt is now more than 22 times larger than it was when Jimmy Carter became president.
#17 It is being projected that the U.S. national debt will surpass 23 trillion dollars in 2015.
#18 Mandatory federal spending surpassed total federal revenue for the first time ever in fiscal 2011. That was not supposed to happen until 50 years from now.
#19 Between 2007 and 2010, U.S. GDP grew by only 4.26%, but the U.S. national debt soared by 61% during that same time period.
#20 The U.S. government has total assets of 2.7 trillion dollars and has total liabilities of 17.5 trillion dollars. The liabilities do not even count 4.7 trillion dollars of intragovernmental debt that is currently outstanding.
#21 U.S. households are now actually receiving more money directly from the U.S. government than they are paying to the government in taxes.
#22 The U.S. government is wasting your money on some of the stupidest things imaginable. For example, in 2011 the National Institutes of Health spent $592,527 on a study that sought to figure out once and for all why chimpanzees throw poop.
#23 If the federal government used GAAP accounting standards like publicly traded corporations do, the real federal budget deficit for last year would have been 5 trillion dollars instead of 1.3 trillion dollars.
#24 The Federal Reserve purchased approximately 61 percent of all government debt issued by the U.S. Treasury Department during 2011.
#25 At this point, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.
#26 If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 480,000 years to completely pay off the national debt.
#27 The official government debt figure does not even account for massive unfunded liabilities that the U.S. government will be hit with in the years ahead. According to Professor Laurence J. Kotlikoff, the U.S. government is facing a future “fiscal gap” of more than 200 trillion dollars.
To understand the lack of concern, President Obama just (unlawfully) revoked the work requirement from welfare reform, ensuring that welfare rolls will balloon upward.