jwwoods32 wrote:
Well, you're right that he didn't have the substantiation to back it up, at least within that piece. But I've heard a number of times from many different analysts $40T and $50T. I heard the former OMB director say he thought it was like $55T. I don't think everybody is just making up lies about the debt. Say it's ONLY $40T - doesn't really give me a warm fuzzy feeling either. The Treasury will probably pull in less than $2T this year (was $2.4T last year - I can back this up). The point is this: we won't be able to meet these obligations. Not a chance. They know this but they're just kicking the can down the road, instead of having the stones to deal with it now, even though it might cost some political points. These grandiose social programs have got to go - one way or the other. They can't be sustained. How about this idea: everybody works, saves enough money to pay for what they need, and stop looking for handouts from the Gov't? People think too much of the Gov't as strong, self sufficient entity that can take care of everybody- it's not. it's basically just clearing house for our money. We can learn something from the Chinese in this respect. The Chinese Gov't provides very little assistance to people. No health care, etc. And you know what happens? People save their money. They save alot because they know they don't have Gov't backstops to fall back on. And our Gov't is wrong - people don't have to spend to revive the economy. Saving is better, because when people put their money in bank accounts and such, the banks don't sit on this money (at least the ones that aren't in trouble) - they invest it. The money becomes capital investment.
The problem is that insurance is not a business where they can be fully funded. I may have health insurance which has an annual maximum of 1,000,000 payout, but with a group of 5000 employees they do not need 5000 X 1,000,000 dollars to be able to cover the medical claims. I think that fully funded is where the cash on hand plus the premiums coming in are more than enough to cover the estimated claims. And Insurance companies will also purchase re-insurance to handle the few cases where the level of an individual's claim passes a certain threshold, say 100,000.
In the case of all insurance companies and all policies, there is a network of coverage that ensures that under normal circumstances claims will be covered.
As for Pension Plans, most people in the United States are not covered under any pension plan other than their 401k or IRA, if they have one. With the few that are, the idea is to have investments that will cover the pension payouts for their covered members. While I agree that all pensions are underfunded, just the sheer number of people you would have to cover for even 40 Trillion Dollars to be the underfunded amount is staggering. An individual with annual payments totalling 50k with a life expectancy of 30 years after retirement would have total payments of 1.5 Million. To have 99 Trillion of underfunding you would need 66 million people covered under a pension plan with zero funding. I have a hard time believing that 66 million people are covered under a pension plan (or that they will live 30 years beyond retirement, for that matter).
All I am saying is I want to see some numbers before I would give any of these claims any merit.
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