The first chart focuses upon the nation’s entitlement-driven spending problem. The situation isn’t “bad” but “dire.” Mauldin observes:
In less than 10 years, at current debt projection growth rates, the
third-largest expenditure of the United States government will be
interest expense. The other three largest categories are all
entitlement programs. Discretionary spending, whether for defense
or anything else, is becoming an ever-smaller part of the budget.
Social Security, Medicare, and Medicaid now command nearly
two-thirds of the national budget and rising. Ironically, polls suggest
that 80% of Americans are concerned about the rising deficit and
debt, but 69% oppose Medicare cutbacks, and 78% oppose
Pretty scary stuff, no?
But it gets worse.
Somewhere around 2025, entitlement spending plus interest payments will be more than the federal government’s total revenue and the deficit will explode. Check out the second chart:
But this chart also cannot happen, because the bond market and
the economy will simply implode before it does.
This isn’t the stuff of “doom and gloom.” It’s the bag the next generation will be left holding. They had better awaken today if they don’t want to face the reality these charts portray will be theirs tomorrow.
Let the discussion begin…
To read John Mauldin’s post, click on the following link: