Five budget realities no politician will talk about (not even Ron Paul)

Ron Paul deserves credit for making the boldest proposals of any candidate in the presidential race. The astonishing reality of the federal government’s budget situation, however, is that even his plans might not be enough to keep Uncle Sam out of bankruptcy. While President Obama offers a $3.8 trillion budget that optimistically might cut the federal deficit to $575 billion by 2018, federal data suggest the United States is already broke. The Federal Reserve estimates that the net value of all private assets, including real estate, stocks, bonds, businesses, cash, etc., is $57 trillion. But the Treasury Department estimates the federal government’s net worth is a negative $61 trillion. Here are five budget realities that no candidate wants to acknowledge:

1. Medicare is America's largest budget burden

Robert F. Bukaty/AP
Republican presidential candidate Rep. Ron Paul (R) of Texas is accompanied by his wife, Carol Paul, as he speaks to his supporters following his loss in the Maine caucus Saturday. Of all the candidates, he has made the boldest proposals concerning the budget.

Through Medicare, the federal government has promised to pay our medical bills when we retire. In return, we pay 1.45 percent of our wages, and employers pay another 1.45 percent. When economists add up expected tax revenue and subtract promised benefits over the next 75 years, discounting future amounts by an assumed interest rate, they find that the government is short by $37 trillion. Federal spending on medical care is the biggest contributor to the government’s budget problems, and many economists believe that even this figure understates the true problem.

In Mr. Paul’s economic plan, Medicare spending increases by 20 percent from 2013 to 2016, the same as Mr. Obama proposes. Paul says that his plan “honors our promise to our seniors.” It does, but the promise will be difficult to keep, since Paul also proposes allowing younger workers to opt out of Medicare, which would cut revenue coming into the program.

GOP presidential candidate Mitt Romney also promises to “honor our commitments to our seniors” and attacks Obama for cutting Medicare. Romney has made vague promises to save money by raising eligibility ages, but these promises will be difficult to keep after attacking Obama for his own supposed cuts. 

Democrats are often thought of as the tax-and-spend party as opposed to budget-cutting Republicans, but party affiliation is not a good predictor of the behavior of elected officials. For example, $7 trillion of the $37 trillion Medicare shortfall comes from an initiative of President George W. Bush, Medicare Part D, and under President Obama, the payroll taxes that fund Medicare have been cut.

1 of 5

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to

You've read  of  free articles. Subscribe to continue.