| | Medicare Drug Benefit Is the Single-Largest Contributor to $50 Trillion Federal Liability | |
The nation’s financial condition is “worse than is widely understood,” writes David Walker [Comptroller General of the United States]. “Continuing on our current fiscal path would gradually erode, if not suddenly damage, our economy, our standard of living, and ultimately even our domestic tranquility and our national security.”
Walker estimates the government’s total reported liabilities at $50 trillion, or four times the GDP, up from $20 trillion or two times GDP in 2000. The single largest contributor was the Medicare drug benefit passed in 2003.
Change is imperative: “A government that in our children’s lifetime does nothing more than pay interest on its debt and mail checks to retirees and some of their health providers is unacceptable.”
The average household burden of federal liabilities is 9.5 times median household income.
If no action is taken now, balancing the budget in 2040 could require cutting spending by 60%, or doubling federal taxes. Growth, ending earmarks, stopping the war, and letting tax cuts expire will not be enough.
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