From Birch Gold Group
Fiscal year 2018 wasn’t a good one for U.S. Government net-worth. While that may hardly be surprising, it’s possible we’re reaching a “tipping point.”
From an official report released by the U.S. Treasury, Sovereign Man pulled out a few key highlights:
- In Fiscal Year 2018, the government’s total net loss was $1.16 TRILLION.
- … they spent over $4.5 trillion.
- … nearly HALF went to Social Security and Medicare.
- … spent a record $523 billion just on interest payments on the national debt!
But one official estimate from the Treasury report stood out primarily because it appears potentially catastrophic (see red arrows below):
Your eyes are not deceiving you. The official estimate of the long-term spending gap for Social Security and Medicare together is a staggering -$53.8 trillion —almost 10% higher than 2017.
(Non-interest expenditures also rose 185.2% – but that’s for another article.)
To put the Social Security and Medicare spending gap in perspective, it amounts to ~67% of the entire World’s GDP.
According to Sovereign Man’s report, the U.S. Government does have $3.8 trillion in assets to account for some of this damage. However, those assets are immediately offset by the $25 trillion in liabilities (like the National debt).
When you add the Social Security spending gap to the liabilities, you begin to realize how deep the “spending hole” actually is.
Is Social Security Suffering from Debt Drawbacks?
Debt and negative balances are a normal part of how the U.S. economy operates, but the numbers are continually getting worse every year. Where do you draw the line?
For Social Security, we already know that if nothing is done over the next 15 years, entitlement programs could be running on fumes. We also know that Congress isn’t helping the problem.
But another interesting part of the official Treasury report highlights what could be yet another glaring problem, something along the lines of robbing Peter to pay Paul. From page 20 of the report, we see one part of the Government is borrowing from the other (emphasis ours):
In addition to debt held by the public, the government has about $5.8 trillion in intragovernmental debt outstanding, which arises when one part of the government borrows from another. It represents debt issued by the Treasury and held by government accounts, including the Social Security ($2.9 trillion) and Medicare ($301.0 billion) trust funds.
So when this “non marketable debt” issued by the Treasury and held in Social Security’s coffers needs to be paid back, funds will obviously be necessary:
When those securities are redeemed, e.g., to pay Social Security benefits, the government will need to obtain the resources necessary to reimburse the trust funds.
As we’ve already seen, these needed funds don’t appear to be available. Raising the retirement age or raising taxes only puts off the inevitable. This “spending hole” may simply be too deep to fill.
Don’t Wait for the U.S. Government to “Help”
Whether or not Social Security runs out of money in the near future remains to be seen, but one thing is certain: Social Security’s future is in jeopardy, and the Government isn’t helping.
So if you have an unexpected emergency, increased medical or cost-of-living expenses during retirement… well, you shouldn’t expect to rely on the Government to lend a helping hand.
Instead, you’ll want to reply on someone you can trust, such as yourself. You can do so by adding protection to your retirement portfolio through diversification in a variety of asset classes. Doing so with assets such as precious metals helps protect your hard-earned savings during times of political and economic uncertainty and helps ensure you’re prepared when an unexpected emergency arises.
After 8 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.
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When the whole push of the article is buy gold and silver, remember its value also bounces up and down just like stocks, but it hasnt recovered to its last highs yet. Gold hit 2200 and silver 48 in the last ten years.
Was not SS called at one time The widows fund? It is understandable that people are living longer. However in many instances SS has become a welfare program instead of the retirement program it was meant to be. Lets start with the millions of disabilities being paid out by the program. When I was a kid being disabled meant that one was unable to do “Any” job. Even then the family was responsible for the well being of that person.Not SS. Then there is the children’s survival benefit. Where if one parent dies.All the children below 18 receive SS until they are 18. Then there is SSI for layabouts that never accumulated enough credits to collect regular SS. Then there is “Illegals” and non citizens getting it. I am sure there are more. This may get me some down votes. Just saying.
The last item is what pisses me off. The illegals bring their elderly parents and they end up getting money without ever working here.
When Birch said it is possible we are reaching the tipping point I stopped reading. We reached that point with the election of George w. Bush. There has been no turning back since then.
I would say LBJ. Without Medicare adding to the misery, some of this might have been functional. Now they want to add everyone to Medicare. Yes, Medicare Part D – the wonderful creation of Bush and his republican cronies – made things SO MUCH WORSE. Putting the entire nation on Medicare would be like pulling up along side the Titanic after it struck the iceberg, and emptying the cruise ships onto the Titanic. How can anyone take these idiot democrats seriously? I suppose if the republicans hadn’t simply thrown a trillion dollar bone to their bigPharma puppetmasters back in the 2000s, it might be a bit easier to take their “concerns” about Medicare a bit more seriously.
My sophisticated analysis shows that the tipping point will be broached when the 10 year yield hits somewhere between 5% and 10%. At that point the Treasury will default on all debt instruments and Social Security will start paying in Venezuelan bolivars.
“How U.S. Government Debt May Impact Social Security”
Uh, by not being able to pay it out anymore or otherwise paying in a deeply devalued currency? Tune in tomorrow when I explain why water comes out of your faucet every time you turn the handle-thingy.
