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If this number were resolved according to the MRF deal, the Treasury would need to issue $700B more warrants annually for the next fourteen years (not remotely possible). Total debt would race ahead faster then its current nosebleed trajectory. The USA would pass 150% Debt to GDP before 2020.

The program’s total unfunded obligations — $20.5 trillion according to the report — grow at an interest rate that is larger, on average, than the productivity-plus-population-growth formula that determines growth of the payroll tax base. Calculations based on micro-data sources of demographics and economic behavior suggest that the program’s long-term financial shortfall is about 50 percent larger than the trustees are letting on.

The year that TF assets will equal one year of payments will be ~2026. This means that anyone who is age 53 today can expect to get 75% of the value that a baby boomer will get.

What did Obama do with two years of Democrats controlling both senate and the house? Is Obama just “hoping” that things won’t “change” when the money runs out? Is he hoping Americans will remain docile and asleep? Will you? Surprise! Reality rears its ugly head before Obama clinches reelection. What is his answer to social security and medicare running out of money? Go campaigning with more of your borrowed money to try buying votes with government giveaways. Can we stand four more years of this leadership vacuum?

It is impossible to grow our way out of this hole. Arithmetic, rather than economics or politics, dictates the two options! The Ponzi scheme known as the democratic welfare state has run its course. Only its obituary is left to write.

At the very least, can our economy survive such a crushing burden of government spending, and its attendant level of taxes and debt? Given this looming disaster, President Obama has just submitted a budget that explicitly rejects “austerity,” avoids any reform of Medicare or Social Security, and adds some $7 trillion to the national debt over the next ten years.

The report provides a dismal outlook for the economy. I think the CBO report has created a big headache for a good number of folks in D.C. Most of them are running for office this year. They certainly won’t be able to wave the CBO report as a measure of how well they are doing.

Although Boehner and many house Republicans tried to “do the right thing” in extending the payroll tax holiday for a full year and the doc fix for two years they were crucified by the media over what amounts to a $40 dollar a month tax cut which cuts payments into social security. The media helped Obama paint himself as a tax cutter even though he has raised taxes, health insurance premiums, and energy costs way more than $40 a month.

Calling the proposed Obama tax cut a “phony” job creator Krauthammer reminds us that McGovern tried to buy votes the same way by offering everyone $1,000 and was laughed out of town. McGovern lost in a landslide and that is exactly what is going to happen to Obama. The “tax holiday” went down in the senate 51-49 over disagreement in how to pay for it.

Dr. Coburn discussed the prospect of passing the Democrat’s plan to extend the payroll tax cut and the costs associated if this is carried out, as well as the effect Congress’ failure to put forward a deficit reduction plan will have on our immediate future.