But the not-so-good news on top of this astounding and growing indebtedness is that we will have to borrow even vastly more than the current budgets propose. Starting in 2017 (just eight years from now), the Medicare trust fund will be depleted. We then will begin to experience a Medicare revenue shortfall that ultimately will total between $35 trillion and $40 trillion during the following 60 years. Social Security’s depletion will begin 20 years later and will have a shortfall of a little less than $10 trillion during the same period.
Oh, and the current budget projects that defense spending will decrease as a percentage of the federal budget. While the overall budget is slated to grow 75 percent during the next decade, defense is to grow just 17 percent. Only imminent and eternal peace would permit such low defense expenditures. The administration’s health plans also will add a currently unfunded $1.5 trillion per decade.
Not only does continued, increased government borrowing ever more sap our economy but also, as the baby boomers retire, we will move from the recent statistic of four workers for each retiree to two workers for each retiree. That means a weaker economy, as this smaller work force will not produce enough to support all of government’s costs — even with massive and persistent tax increases. And if, as seems possible, sometime in the next decade the world resists lending our government sufficient money (because our economy will be too small to produce enough to pay the ever-growing interest on the debt), then we finally will be forced to make choices of what to buy and what to forgo. Maybe only subsidized pain pills rather than medical treatment for old people? Only 50 percent payment of Social Security benefits? Default on federal debt payments? Or what the Chinese already are worried about: monetizing the debt, leading to hyperinflation?