NOTEBOOK: US outstrips Greece in debt stakes

National Review, February 22.

With seemingly every day bringing more bad news from Europe, many . . . ask how much longer the United States has before our welfare state follows the European model into bankruptcy.

The bad news is: it may already have.

This year, the fourth straight year that we borrowed more than $US1 trillion to support our government, the budget deficit will top $US1.3 trillion – 8.7 per cent of gross domestic product. If you think that sounds bad, it’s because it is. In fact, only two European nations, Greece and Ireland, have larger budget deficits.

And as bad as things are right now, we are on an even worse course for the future. If one adds the unfunded liabilities of Social Security and Medicare to our official national debt, we really owe $US137 trillion . . . an astounding 911 per cent of GDP.

Counting both official debt and unfunded pension and health-care liabilities, the most indebted nation in Europe is Greece, owing 875 per cent of GDP. That’s right, the US potentially owes more than Greece.

Given this looming disaster, President Obama has just submitted a budget that explicitly rejects “austerity”, avoids any reform of Medicare or Social Security, and adds some $US7 trillion to the national debt over the next 10 years. And the Republicans? They are busy debating the pros and cons of birth control.

What is wrong with this picture?

The Australian Financial Review