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Wednesday, June 13, 2018

The Federal Government Is Bankrupt

No money source in the world has enough money to cover the US government's budget deficits. Now what?

It’s a well-established fact that Social Security and Medicare are in serious trouble and have been for a while. The newest projections released last week have Social Security being insolvent in the year 2034 and Medicare in 2026. A fair amount of this trouble can be laid at the feet of the federal government and its seemingly insatiable habit of spending money it doesn’t have. It’s gotten to the point that there isn’t really anywhere else in the world that has the amount of money the US government needs to borrow. It seemed so easy to just take that money from the Social Security and Medicare trusts at the time, but with federal spending now higher than it’s ever been (regardless of whether you adjust for inflation or simply count it as a percentage of GDP), it seems very unlikely that that money will—or even can—ever be paid back. So, what’s a government to do? Join Antony Davies and James Harrigan as they talk about this and more on this week’s special live-from-FEEcon episode of Words and Numbers.

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Quick Hits

Anthony Bourdain

Charles Krauthammer

Lemonade stand shut down 1

Lemonade stand shut down 2

Lemonade stand shut down 3

Country Time comes to the rescue of children’s lemonade stands

Foolishness of the Week

Bernie Sanders believes socialist ideas are winning

Topic of the Week: Federal Bankruptcy

Historical CBO projections

Debt myths debunked


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  • Dr. Antony Davies is an Associate professor of Economics at Duquesne University, and co-host of the podcast, Words & Numbers.

  • James R. Harrigan is a Senior Editor at the American Institute for Economic Research. He is also co-host of the Words & Numbers podcast.