For many years, American politicians have been fooling the public into believing our national debt is only $23.3 trillion(currently). They effectively ignore the government’s “unfunded debt” as if it really wasn’t debt. It is real debt and the American Society of Public Accountants say it is and would include it on the balance sheet under liabilities if the government reported one.
This “unfunded debt” is massively understated on the USDEBTCLOCK.ORG. That is because the $175 trillion has been reduced by at least $100 trillion. The projected real liability of $275 trillion was reduced by the $100 trillion by the payroll, Medicare and other taxes the government anticipates receiving in future years.
To fully understand how serious this condition is, realize that the government’s annual budget is only $4.7 trillion and of that $1.3 trillion are anticipated Payroll and Medicare tax receipts. This clearly illustrates what a mess our politicians have made of our financial condition. It is this predicament the Prosperity Commission faced in drafting its USA Plan.
The first decision was to make even the poor wealthy enough to afford excessive medical costs as well as funding an affluent life after retirement. As the “Golden Rule” insists that a man or a woman fund their own retirement, we took the 15.3% taken by the government from everyone’s paycheck and placed in their own Universal Savings Account(a “USA account”) and had them chose what indexed funds they could invest in. See here for the average $50,000 employee.
The average $50,000 a year employee could wind up with a $7.4 million dollar nest egg. Thus, the affordability issue was covered. The move also had an absolutely debt crushing effect. No unfunded liabilities needed to be recorded for those with 20 years or more invested in their USA. The Plan called for a removal from liability once the amount they would have gotten from their USA was the amount they would have been entitled to from Social Security and Medicare.
The end result is that Americans would all be wealthy yet still be able to do menial tasks for million-dollar pay days. They would be able to afford great medical insurance and still lead an affluent life. The $275 trillion would quickly go from the balance sheet to the dustbin. And don’t forget the $100 billion a month of investment capital – it could be used.