More On the Coming U.S. Fiscal Train Wreck

The 2009 Financial Report of the United States Government is now available for scrutiny.

Go to: http://www.gao.gov/financial/fy2009financialreport.html. The entire report can be downloaded as can individual chapters. The Management's Discussion and Analysis chapter is 30 pages long and presents the essence of the report.

The essence of the report is disquieting, to say the least. Here’s the bottom line for 2009. Seventy-Three percent of net government expenditures in 2009 were accounted for by Medicare and Medicaid ($866.4 billion), Social Security ($736.6 billion), the Department of Defense ($718.4 billion) and Net Interest on the Federal Debt ($189.1 billion). (Another $10.5 billion for nuclear weapons comes out of the budget of the Department of Energy. So figure current year defense spending at $728.9 billion.)

If we want to do something about the massive U.S. fiscal deficit, we need to do something about these four programs. Assuming that the U.S. will not default on its interest payments, then the focus has to be on three Government departments – Health and Human Services, Social Security, and Defense.