Is the United States Going Broke?

Chris Martenson of The End of Money blog, wrote:

The US is insolvent. There is simply no way for our national billsto be paid under current levels of taxation and promised benefits. Our federal deficits alone now total more than 400% of GDP.

Apparently, the situation is so bad that even the Government Accountability Office can't make heads or tails about how bad it actually is..

In his accompanying statement to the report, David Walker, Comptroller of the US, warmed up his audience by stating that the GAO had found so many significant material deficiencies in the government’s accounting systems that the GAO was “unable to express an opinion” on the financial statements. Ha ha! He really knows how to play an audience!

In accounting parlance, that’s the same as telling your spouse “Our checkbook is such an out of control mess I can’t tell if we’re broke or rich!” The next time you have an unexplained rash of checking withdrawals from that fishing trip with your buddies, just tell her that you are “unable to express an opinion” and see how that flies. Let us know how it goes!

So, here's the really bad news:

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.

Read more about how screwed we're going to be: Link - via reddit

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So he's kind of comparing apples to oranges isn't he? He's using an extremely loose interpretation of the budget deficit (using things that aren't normally included in the deficit) and an extremely strict interpretation of the GDP. Shouldn't he be noting that the US household net worth was over 50 trillion last year? Sure, that's not normally included in the GDP but if we're going to be fudging numbers why not go whole hog?
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I believe the 8 trillion is only the 'normal' budget, where this guy is including off-budget programs like Social Security, which could be considered part of the gov's bigger dept picture with all of the new pay-outs coming up.
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I wonder where the 50 trillion number came from. Even the most pessimistic sources ( have it pegged as only 8 trillion (that's on an almost 13 trillion GDP).

Taken in historical context, the US national debt after WWII was 150% of GDP and Britain's national debt after the Napoleonic Wars was 250% of their GDP, yet both post-war periods were times of unprecedented prosperity.

I think the Union will survive.
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