The United States is $50 Trillion in Debt
The most interesting part of the report was in the conclusion from a section addressing what they call a “Fiscal Imbalance.” From page 156 of the report:
While we are unable to express an opinion on the U.S. government’s consolidated financial statements, the following key items deserve emphasis in order to put the information contained in the financial statements and the Management’s Discussion and Analysis section of the 2006 Financial Report of the United States Government into context. Despite improvement in both the fiscal year 2006 reported net operating cost and the cash-based budget deficit, the U.S. government’s total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the Nation’s total output (GDP) in fiscal year 2006, up from about $20 trillion, or two times GDP in fiscal year 2000. As this long-term fiscal imbalance continues to grow, the retirement of the “baby boom” generation is closer to becoming a reality with the first wave of boomers eligible for early retirement under Social Security in 2008. Given these and other factors, it seems clear that the nation’s current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation’s large and growing long-term fiscal imbalance.
The US went from $20 trillion in debt in 2000 to $50 trillion in 2006. Not a Good Thing™. This report uses the same Generally Accepted Accounting Principles (GAAP) that the SEC requires all publicly traded companies to use. So it is far more accurate than the cash-basis reporting normally used which ignores long-term obligations that don’t have to be paid yet, such as Medicare and Social Security.
I found this article from WorldNetDaily to be helpful in summarizing the report, though I didn’t follow any of the links at the bottom.
UPDATE: There is another article by Dr. Chris Martenson on FinancialSense.com that covers this issue very well. He says he’s heavily invested in gold and silver, which should help in the event of massive inflation. It’s a good way to avoid losing your savings once the financial obligations we’re in, which are common in many Western nations by the way, start coming due and the government starts inflating its way out of debt.
My plans are a little unsure at the moment. I believe in the coming crisis (who couldn’t with the US Treasury itself announcing it) but don’t really want to start buying gold with the little cash I have. I do have several paper investments (like stocks and mutual funds) and am planning to switch to things that generate direct income, such as real estate and businesses. There is a good Wikipedia article on buying gold if that ever starts to look like a good choice.