Bad in the Broadest Sense

It’s true, as Barry Ritholtz notes in "Deficit Hawks Want New (or Double Dip) Recession," that the world is suddenly rife with warnings about fiscal irresponsibility from people who didn’t have a lot to say on the topic before the financial crisis erupted.

That said, those of us who were warning about financial Armageddon when others in Washington and elsewhere were oblivious made it clear that the real concern was the huge gap between the retirement-related promises Washington had made and the resources that were available to meet them.

In "U.S. Headed Toward Bankruptcy, Says Top Budget Committee Member (Must See Video)," The Daily Bail points us to a video that sheds some additional light on just how bad things are in the broadest sense.

Video: Wisconsin Rep. Paul Ryan, ranking Republican on the House Budget Committee, says the current fiscal path will bring the U.S. government to bankruptcy.

As Ryan explains, the nuts are the unfunded liabilities — promises without revenue. One of the better discussions I’ve seen on the issue. Set aside a few minutes.

• “We know that for a fact.  All the actuaries, all the objective scorekeepers of the federal government, are predicting bankruptcy.”

• “They say we are $53 trillion short of fulfilling the promises the government is making to the American people, in today’s dollars.”

• “Meaning that if we want to keep the promises of Medicare, Medicaid and Social Security, which are basically the three major entitlement programs, today we would have to set aside $53 trillion dollars and invest them at Treasury rates in order to do it.”

• “By the time my three children – who are three, five and six years old—are my age, the federal government will have to tax 40 cents out of every dollar made in America just to pay the bills for the federal government at that time.”

• “The legacy of this country has always been that each generation confronts the challenges before it so that the next generation is better off,” said Ryan. “In the past, we brought down the Iron Curtain and won the Cold War.  We got through World War I. We got through World War II.  We won the war on the Great Depression."

• “The problem that we have right now—putting foreign policy aside and our fight with Islamic radicalism—is that we have an economic crisis, we have a fiscal crisis, and, that is, we will bankrupt this country, and the best century in America will be the last century,” he added."