Global Economic
Trend Analysis

Recent Posts

Wednesday, March 02, 2011 3:56 AM

USA Incorporated - a Look at the Grim Financial Situation of the USA

Mish Moved to MishTalk.Com Click to Visit.

Inquiring minds are digging deep into a 266 page PDF called USA Inc. a basic summary of America's financial statements.

It is loaded with stunning graphs and charts on Social Security, Medicare, Medicaid, TARP Bailouts, Fannie Mae and Freddie Mac, military spending, tax revenues, and various projections. Here are a few images, but please give the document a closer look when you have a few moments.

Click on any chart to see a sharper image.

Cash Flow

Expenses at a Glance

Unfunded Liabilities

Federal Spending as Percent of GDP

Note this mess started with the creation of the Fed

Growth in Entitlement Spending

Take a step back, and imagine what the founding fathers would think if they saw how our country’s finances have changed. From 1790 to 1930, government spending on average accounted for just 3% of American GDP. Today, government spending absorbs closer to 24% of GDP.

Spending + Interest vs. Revenues

By 2025, entitlements plus net interest payments will absorb all – yes, all – of USA Inc.'s revenue, per CBO.

Less than 15 years from now, in other words, USA Inc. – based on current forecasts for revenue and expenses - would have nothing left over to spend on defense, education, infrastructure, and R&D, which today account for only 32% of USA Inc. spending, down from 69% forty years ago.

This critical juncture is getting ever closer. Just ten years ago, the CBO thought federal revenue would support entitlement spending and interest payments until 2060 – 35 years beyond its current projection.

To 25 Countries in Defense Spending

Entitlement Spending by Household

Medicaid Underfunding

When Medicaid was created in 1965 to provide health insurance to low income Americans, 1 in 50 Americans received Medicaid, now 1 in 6 Americans receives Medicaid.

Healthcare Spending

Social Security Workers vs. Retirees

Social Security Dependents

GSE, Fannie Mae, Freddie Mac Expansion

If that is not a shocking state of affairs, what is? There are lot more charts and graphs in the PDF.

Mike "Mish" Shedlock
Click Here To Scroll Thru My Recent Post List

Last 10 Posts

Copyright 2009 Mike Shedlock. All Rights Reserved.
View My Stats