Understanding America’s Biggest Problem in Just Two Minutes

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Despite all the political parties and media focus on stupidity gone wild, the biggest financial problem facing the Republic isn’t military spending, random departments or even government waste. These aren’t the biggest parts of the federal budget, nor are they exponentially increasing.

Of course I think military spending should be cut and a great number of Federal departments closed in their entirety, but our problems are very structural and are never even voted upon by Congress. They aren’t part of “discretionary” spending, and therefore are guaranteed to continue each year without even having a debate: Medicare, Medicaid and Social Security are the real problems.

These programs are the fastest growing part of the federal budget with tens of TRILLIONS, not billions – TRILLIONS, in growth and completely unfunded liabilities just over the next 10 years, as shown in this report from Chris Edwards at the Cato Institute.

Without fundamentally altering these programs, the Republic will collapse. Not potentially collapse, not possibly collapse. Definitely collapse. It is a problem of raw mathematics, the likes of which neither Greece nor the world has ever seen. How can I say that? Because if you rounded up all the wealth from all the billionaires in the US – meaning you take all their money – you still couldn’t fill the whole created by these programs.

The debt bubble will burst for the world, and financial collapse will occur because of socialism on an unprecedented scale – Medicare, Medicaid and Social Security are THE problems, and no one wants to discuss them. If they didn’t need the money – the STATE wouldn’t be confiscating wealth from Americans to feed this beast.

This chart sits in Ron Paul’s office in DC (yes, I have seen it myself), so let’s see what is stressing the good doctor – Federal Budget by category: http://www.federalbudget.com/

Looking at the largest areas of expenditure and growth, you will see the Treasury Department, which is mostly payment on the National Debt, exploding in growth and soon to eclipse military spending . Yes, we will be paying more in interest on the National Debt than spending on National Defense.

You’ll see growth in a number of areas, but nothing compares with the “HUGE” jumps in Medicare/Medicaid (Health and Human Services) and Social Security.

The reason I use the word “HUGE” is that the majority of healthcare expenditure in life comes after age 65, and “baby boomers” are the largest segment of the US population. Over the next 15 years, almost all baby boomers will go over age 65. That means the largest segment of the US population will begin utilizing Medicare and Social Security, therefore the costs to maintain those programs in their current form is about to skyrocket by trillions of dollars. All this will happen while the number of contributors to those programs decreases, since the baby boomers are also the largest percentage of the work force.

Medicare is an even bigger problem than Social Security because of per-person spending, and a larger disparity created by the funding model. To put this in perspective – these programs hold the single largest unfunded liability in world history.

Bottom line – Socialism, better known as STATE managed healthcare and retirement, has already brought down the Republic. You may not like that term, socialism, but the American people and especially elected officials are simply in denial of the problem. It is not a matter of opinion or differing political views. It is a matter of time and mathematics. There is not enough money in the entire economy to cover the costs of these programs.

Using the STATE to facilitate interdependence in society is called collectivism. Republicans and Democrats alike have helped construct the collectivist leviathan known as the STATE. No one is free from blame – especially the American people, as we let this happen.

Collectivism is the great disease of our time. Individualism is the only cure. Federalism holds the means, but before anything changes – Americans must first accept the responsibility to treat themselves. Self-ownership is the key.

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