Arrested Pulse

The Warnings

The United States is heading into a fiscal crisis of unfathomable proportions. Our economy is the world's largest, with a total value of $14.1 trillion. However, our national debt is more than half the size of the total value of our economy: $9.3 trillion.¹ This is how much the federal government -- primarily under Republican presidents -- has incurred and which U.S. taxpayers must pay off. As of this writing, each U.S. taxpayer owes $79,000 toward this debt, which is rapidly increasing at the rate of $1 million per minute!

¹[On January 19, 2009, the last day of George W. Bush's presidency and seven months after I wrote this blog, the national debt was nearly $11 trillion. Hence, the numbers given in this blog are actually much higher now. Each U.S. citizen (not taxpayer, citizen), for example, owes $185,000 each toward the real national debt.]

Bad, eh? Well, it gets much, much, much worse. The impending insolvency of Social Security and Medicare, which current Treasury Secretary Henry Paulson refers to as a fiscal train wreck unless something is done immediately, is expected to saddle taxpayers with an almost incalculable price tag of $53 trillion. Add this to the national debt, and the total (again, as of this writing) is an astounding $59.1 trillion—more than four times the size of the entire U.S. economy! In order to pay this gargantuan bill for the legion of unfunded promises made by federal, state, and local government, each U.S. household will have to come up with $516,348--or pay $31,000 per year for the next 75 years, beginning now.

Who's sounding these warnings?

Short answer: not paranoid neurotics who've smoked too much dope and see the crack of doom in each pothole.

David Walker, Comptroller General of the United States and head of the Government Accountability Office (GAO) from 1998 to 2008, compares the present-day United States with the Roman Empire in its declining days, saying the U.S. government is on a "burning platform" of unsustainable policies with respect to deficits and debt. His personal appeals to the public have been pretty much ignored. Until now. Patrick Creadon's forthcoming documentary I.O.U.S.A. will bring Walker's mission, and awareness of the threat the national debt poses to us all, to a theater near you.

Walker is someone we should all pay attention to. He is currently CEO of the Peter G. Peterson Foundation, which seeks to enhance public understanding of the unsustainability of our entitlement benefits, health care costs, account deficits, energy consumption rates, and competitive gaps in our education system. This is a clip from 60 Minutes featuring David Walker and his dire forecast of what lies ahead for the United States.

Walker is not alone, of course. Former independent presidential candidate Ross Perot, who has always argued that national security is based on sound fiscal policy and financial stability, has come out with an ultra-patriotic website, Perot Charts, which aims to explain--using a multitude of visual aids--just how bad this situation is.

On August 23, 2006, Nouriel Roubini, president of Roubini Global Economics, warned that the United States was heading into a sharp economic downturn--that would be "much nastier, deeper, and more protracted” than previous recessions. Speaking of the subprime mortgage meltdown, Wells Fargo CEO John Stumpf told a Merrill Lynch banking conference in New York: "We have not seen a nationwide decline in housing like this since the Great Depression."

Get ready for the "Panic of 2008" warned Trends Research Director Gerald Celente on November 11, 2007: “We are going to see economic times the like of which no living person has seen.” Celente, who correctly forecast the U.S. dollar’s dramatic depreciation over the past couple years, warned that the subprime mortgage meltdown and massive corporate losses will result in a drastic reduction in Americans' standards of living.

Too many in-the-know people are sounding warnings that we MUST not ignore if we want to live and ultimately retire in a world that is not fraught with hardship and insecurity. Let's heed their warnings, NOW.