The status of the current American economy is precarious. One of the best measures of a country’s economic health is the debt-to-GDP ratio, an indicator of the relationship between debt and production. US debt on the date of President Obama’s inauguration (Jan. 20, 2009) was$10.6 trillion. On February. 21, 2014, it was $17.39 trillion. This is a 64 percent increase in the national debt over five years, an annual increase of 10.4% compared to an economic growth of less than 3% annually.
When Barack Obama was first elected, the U.S. debt to GDP ratio was under 70%. Today, it is over 101%. Further, the unfunded liabilities (obligations without funding sources) is well over $100 trillion. This includes Medicare Part A at $36 trillion, Medicare Part B at $37 trillion, Medicare part D at $15 trillion, and Social Security at $17.5 trillion for a grand total of unfunded liabilities over $105 trillion. America has economically fallen far in the past few years. This suggests that absent draconian measures to cut entitlements (currently above 60% of GDP and growing), the United States may face an environment of bankruptcy or broken promises. Our current set of economic problems (accompanied by an unwillingness to address them) puts us on a path trajectory that looks more like Greece in the future. Greece is currently in economic triage and is widely considered an embarrassment to western civilization. Like Greece, we can not grow ourselves out of our current economic difficulties without concomitant entitlement reform.
- Savings accounts could be reduced substantially.
- Taxes will skyrocket.
- Personal danger within society will increase.
- Payments from the government will dramatically decrease or stop.
- People will have a large reduction in standard of living with widespread poverty.
- The stock market will drop precipitously and credit markets will seize.
- Many financial institutions will fail.
- Most government funding will slow/disappear.
- Many businesses will close/lay off people.
- Infrastructure failure will proliferate (phone, water, power, etc.).
- Mass rioting will be likely.
- Dictatorship/martial law will be imposed.