What Is the Unfunded Liabilities Monster?
The unfunded liabilities monster is the sum total of financial promises the United States government is promising to keep, although it has basically none of the money it is promising to pay.
The unfunded liabilities monster is composed of various social welfare and social insurance programs, with the largest and most well-known being the big three - Social Security, Medicare, and Medicaid. These programs are holding promises to provide financial support to the elderly, physical disabled, and low-income earning Americans using taxation of the American people.
What is the problem? Why is it the unfunded liabilities monster?
The unfunded liabilities are liabilities because they are promises to pay and unfunded because there are no funds to pay them.
Making the Monster Real
Here is a simple way to see the monster and make it real.
Make a list of all the liabilities you are expected to pay for the next five years, such as your mortgage, car loan, school loan, and credit card debt. For each liability, write out the amount you are expected to pay year by year. Now, move from each payment year by year and erase it if you have a plan to pay that money. For each payment you do not have a plan to pay for, circle.
If for example, you are planning on increasing your liabilities over the next five years by purchasing a car or a home and you do not plan to increase you income correspondingly, then by going through this exercise you would see that when you take on those added payments you will be expected to pay out more than you bring in.
In order to cover these costs you must either cut the costs, reform the payment programs, sell your assets for extra income, or take money from another area such as your discretionary spending, health insurance, or even food money in order to cover these extra liability payments.
Imagine going through this exercise and seeing nearly all circled payments and having the majority of these circled payment exceed your allotted ability to pay by multiples. In this case, you are the United States.
You have an enormous amount of liabilities to pay and you simply do not have nearly enough money to pay them. In fact, you are expected to pay at least 10 times more than you actually can. Your liabilities are unfunded and they are monstrous.
Over the coming decades and starting before you began are reading these words, through the unfunded liabilities monster the US government is promising to provide at least 10 safety nets for every 1 safety net it is planning to collect from the American people through taxation.
What happens as people who are expecting their financial safety net fall through a mirage of insufficient federal funds? Their financial body shatters and the unfunded liabilities monster licks up the crackled carcass.
How Big is the Unfunded Liabilities Monster?
Although there are various calculations for the sum total of the unfunded liabilities as well as questions regarding Medicaid's technical status as a quote 'unfunded liability', we can reasonably conclude that the size of the unfunded liabilities monster is over $100 tr including Medicaid - a figure that is at least 7 times the entire economy of the United States, let alone the comparatively miniature sum of typical tax revenues.
Questions Deeper Than Money
These promises are looking rather shaky, are they not? Since these unfunded promises are coming from the government and they are supposed to be support for the people, the sight of this Monster raises a few important questions beyond financial matters and into philosophical concerns, such as:
Can we rely on the government for our financial security?
Are we relying on the government for our financial security?
Why are we relying or not relying on the government for our financial security?
Our next and perhaps most personal step is to take on these potentially paradigm-shifting and life-liberating questions.
Jelani Asar invites you to prepare yourself with shocking interviews for the economic nightmare of the Unfunded Liabilities Monster at http://usUnfundedLiabilities.wordpress.com. Call for a free income protection quote in Atlanta, Georgia today.
Article Source: http://EzineArticles.com/?expert=Jelani_Asar
0 comments:
Post a Comment