Take a look at the September 2009 report from the hedge fund and investment company Sprott Asset Management:
US Government Financial Summary
|US Revenue for 12 months ended August 31, 2009||$2,157,940,000,000|
Total Outstanding US Debt (August 31, 2009)
To make it easier for you to understand these colossal numbers, imagine owing $200,000 and earning $3640 per year on your job (that is, optimistically assuming that the economy can grow at 2% per year)! In other words, the earnings per year are only 1.82% of the total outstanding debt, which is far below the rate of price inflation. Based on market rate of interests (i.e. the long-term bond yield), the earnings will not be enough to even cover the interest payments.
No wonder the GFC is not the final crisis (see Is the GFC the final crisis?)!
Richard Fisher, President and CEO of the Federal Reserve Bank of Dallas, is on record stating that unfunded liabilities from Medicare and Social Security totalled $99.2 trillion as of May 2008. The NCPA data above is the most recent estimate available. Fisher?s speech can be retrieved at: http://www.dallasfed.org/news/speeches/fisher/2008/fs080528.cfm