Posted on November 13, 2008

Demand the Truth About Social Security Deficits

In a few weeks, on December 15th, a little known but important document will be released: the annual Financial Report of the U.S. Government. Just like publicly traded corporations, the U.S. Government is audited, and the results are made public. They’re even signed by the Secretary of the Treasury.

You’ve probably never heard of the audit report and may be wondering why. It’s not an accident. As Rep. Jim Cooper writing for the Huffington Post describes it,

[N]o one wants to be blamed for the mistakes of prior management. If the public learns about President Bush’s mismanagement after he is safely back in Crawford, Texas, the bad news could cripple the Obama Administration. People blame the messenger…

[The report is] one of Washington’s best-kept secrets. Neither Bush nor [Treasury Secretary] Paulson has mentioned it publicly because it reveals national deficits and debts that are much larger than the public has been told. The media have unwittingly participated in the cover-up.

Getting to the truth, and doing something about, enormous government deficits is crucial to future retirees, who will be depending on the “800 pound gorilla” of government expenditures, Social Security.

As it stands now, a commonly quoted figure for the national debt is a “mere” 4 trillion dollars (that’s $4,000,000,000,000.00 or 4 million millions). But the government has already borrowed an additional $5 trillion from the Social Security trust fund. (We won’t go into the question of how it intends to pay that amount back).

In reality, according to last year’s Financial Report, when one factors in the true shortfalls in Social Security, Medicare, and elsewhere, the true “fiscal gap” (a polite word for shortfall) is actually an astronomical $53 trillion. This means, among other things, that the U.S. Treasury could lose its AAA bond rating by 2012, which will drive up interest rates, government interest expenses, and exacerbate the crisis.

Rep. Cooper sums up his grim assessment of the situation with the words, “The only question is who will tell the public the truth, and when.”

It’s indeed high time to face unpleasant truths. After the new Congress takes office and President-Elect Obama is inaugurated, write to them—and demand they take a hard look a the truths contained in the Financial Report, and tell the American public what, exactly, they intend to do to save Social Security and Medicare from a gargantuan crisis.

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