December 27, 2012
According to former Congress members Chris Cox and Bill Archer, writing in the Wall Street Journal:
The actual liabilities of the federal government--including Social Security, Medicare, and federal employees' future retirement benefits--already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion.
That is roughly double the entire annual Federal budget.
They go on to note that "to collect enough tax revenue to avoid going deeper into debt would require over $8 trillion in tax collections annually." Expropriating the entire income of the top 25% of households that pay almost 90% of the tax and all corporate taxes would only bring in $6.7 trillion.
I don't know it's kind of like saying "well if I ignore a few credit card bills I really don't have the debt." I feel like the creditors don't feel the same way.
Here again a little perspective goes a long way to give us some insight on this whole "Fiscal Cliff" situation.
Doug Hendee, CFP(R)
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).