Washington, DC -- (SBWIRE) -- 10/10/2014 -- The financial books for the fiscal year of the U.S. government were closed on September 30, 2014 and sadly U.S. taxpayers have $17 trillion of debt to pay the government, reports Dawn Bennett, CEO of Bennett Group Financial Services, in her latest missive to investors. That's in the ballpark of 75 percent of U.S. Gross Domestic Product (GDP), which is nearly double the level it was at when the country experienced the great financial meltdown of October 2008 she points out.
Already the U.S. national debt has expanded by more than $1 trillion in fiscal year 2014 alone. First off, the U.S. owes other foreign governments approximately $5 trillion, as well as entitlement programs, like Social Security beneficiaries. Adding all that together, entitlements, and debt to foreign governments, the number is closer to $17.8 trillion.
Unfortunately, the U.S. debt ceiling limit has been postponed, and we won't have to be bothered by another debt crisis until March 1, 2015, which is the reason many people don’t even know that the Federal government closed out their books last week. Of course, that all depends on how the U.S. Treasury Department fiddles with the numbers on the books, and probably how Congress decides to pass the buck. So for now, it won't be in the headlines of U.S. media. With the mid-term elections next month, this “coincidence” is deliciously convenient, don’t you think?
According to the Brookings Institute's new fiscal barometer, the U.S. entitlement programs have really tied our hands. Today, in the United States, we have a heavily socialized system that hands out checks to nearly half the population. As a matter of fact, 52 percent of all U.S. citizens live in a home that gets some form of monetary monthly benefits from the U.S. federal government each month, according to the Forbes Magazine research.
In 2014, Social Security benefits grew by 4.5 percent to $836 billion, Medicare D benefits paid by the federal government rose 2.1 percent to $487 billion, and Medicaid benefits paid grew 11.4 percent to $294 billion. That's substantial. So, why aren't more Americans worried? When I read these numbers, I get terrified. I don't think we can keep up this level of handouts.
William Gale, co-director at the Brookings Institute, points out “how interesting it is that so many people thought former U.S. President George W. Bush's agenda was unaffordable back when the debt-to-GDP ratio was half as big as it is now, and, now feel that a ratio of 75 percent is nothing to worry about, even though the debt is predicted to go higher."
There are approximately 63 million Americans collecting Social Security benefits. By 2035, that number is projected to rise to a breathtaking 91 million Americans on Social Security. The US. Government is facing a total of $222 trillion in unfunded liabilities during the years ahead, and Social Security and Medicare, make up the bulk of that hefty bill.
So, if this is where we are headed, why do we elect lawmakers who continue to call for more spending and more stimulus? It's just beyond logic! This debt is money the U.S. government owes the American people and other foreign governments. The strangling fiscal policies we have today are giving us an illusion of economic growth from which even the great Houdini could not escape.
Are we running out of options? Has U.S. monetary policy done all it can do? The Federal Reserve is supposed to be ending its quantitative easing this month, and at the same time, increasing its interest rate target. Yet, signs of our dwindling economy are still everywhere in the United States.
Yes the federal government keeps telling us our economy is improving. And yes, President Obama keeps claiming the U.S. economy is getting better, yet our ex-Fed chairman Ben Bernanke, at a recent speaking engagement, where he received his regular fee of $250,000, was actually talking about having a hard time refinancing his mortgage on his house! He admitted that publicly, and he says the mortgage market is still so tight that he can't get his own home refinanced. When he told this to the audience, they thought it was a joke, and laughed, but he said, "I'm not making this up."
It's not good when our own ex-Fed chairman can't even refinance his home loan, and when President Obama continues to tell us we are "better off than we were six years ago.” Bernanke’s public admission of his inability to refinance his home speaks louder than the President ever could.
“And you will know the truth and the truth will set you free”…the depth and the power of this statement has never been more true than in America today.
All market data references are sourced to Bloomberg terminal database.
Bennett Group Financial Services LLC, based in Washington, D.C., is a comprehensive financial services firm committed to providing opportunities to clients’ as they seek long-term financial success. Its customized programs are designed with the potential to help grow, lower overall risk and conserve client assets by delivering a high level of personalized service and skill.
For more information, call 866-286-2268 or visit http://www.bennettgroupfinancial.com
Securities offered through Western International Securities Inc. (WIS), member FINRA/SIPC. BGFS and WIS are separate and unaffiliated entities.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program on called Financial Myth Busting http://www.financialmythbusting.com
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included Rock Legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN as well as take podcasts on the road and forums for interaction.
The show is a great complement to Dawn’s monthly investing seminars that take place at Tysons Corner in McLean, VA, where she discusses investing.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett or firstname.lastname@example.org