According to my calculations based on government data, such [typical] married couples [as I cite in my example] will begin receiving monthly Social Security checks that will, on average, total about $550,000 after inflation. They will receive health-care services paid for by Medicare that, on average, will total another $450,000 after inflation. The benefactors will be a generation of younger workers who are trying to support themselves and their families while paying taxes to finance the rest of government spending.

We cannot even remotely afford to make good on these promised benefits. Although our system of personal liberty, free enterprise and limited government has made us an affluent and upwardly mobile people, we are not yet a nation of [wealthy benefactor] John Beresford Tiptons.

The existence of so many million-dollar couples is not the result of elected officials carefully weighing the needs of senior citizens against the financial ability of younger workers to meet these needs. Rather, it is the result of decades of separate legislative actions by both political parties to liberalize retirement and health-care benefits, the sum total of which no one has bothered to calculate.

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Medicare, the U.S. health insurance program for the elderly and disabled, and the Social Security trust for the disabled and retirees are running out of money sooner than the government had projected.

While Medicare won’t have sufficient funds to pay full benefits starting in 2024, five years earlier than last year’s estimate, Social Security’s cash to pay full benefits runs short in 2036, a year sooner than the 2010 projection, the U.S. government said today in an annual report.

Both forecasts were affected by a slower-than-anticipated economic recovery, the government said. The estimates for funding add urgency to talks between Democrats and Republicans on ways to cut spending to reduce the U.S. budget deficit.

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The federal government will not run short of money to pay its bills on May 16, when the federal debt reaches the legal maximum of $14.3 trillion.

Even after Aug. 2, the deadline the Treasury Department set this week for Congress to lift the borrowing limit, the government might be able to delay a crisis, perhaps even for a few months, through extraordinary measures such as asset sales.

But with every passing week of stalemate over the debt ceiling, the risk increases that investors will start to fret that the United States will not pay its debts, and demand higher interest rates for loans to the federal government.

Should that happen, the cost could be vast and the damage difficult to reverse.

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It’s obviously been a good week for the Obama administration. But it comes at a dangerous time, for both the administration and the economy. The excitement over tracking down Osama bin Laden could end up making the president and his advisers less panicked over the state of the economy. And they should be a little panicked.

For the second straight year, the recovery seems to be at risk of stalling. The economy grew at an annual rate of only 1.8 percent last quarter ”” eerily similar to the 1.7 percent growth last spring, just when job growth started slowing down. Fully 80 percent of people say the economy is in fairly bad or very bad shape, according to a New York Times/CBS Poll last month. More people say it’s getting worse than getting better, the opposite of a few months ago.

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…while President Obama has presided over an unprecedented federal spending spree, he’s far from the first White House occupant to run up big debt numbers while insisting that he’s moving toward lowering them — eventually.

He’s also not the first politician caught between contradictory public demands of lower spending and higher benefits. A Washington Post-ABC News poll released last week reports that 78 percent of Americans oppose cutting Medicare spending, and 69 percent oppose cutting Medicaid.

Yet even most liberal Democrats, including the president, concede this indisputable point: America’s long-term debt crisis will never be solved without containing the soaring costs of Medicare and Medicaid.

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A group of the largest US banks and fund managers stepped up the pressure on Congress and the Obama administration to reach a deal to increase the country’s debt limit, saying that even a short default could be devastating for the financial markets and economy.

The warning over the debt limit is the strongest yet to come from Wall Street, highlighting growing nervousness among investors about the US political system’s ability to forge a consensus on fiscal policy.

The most pressing budgetary issue confronting Congress and the Obama administration is the need to raise the US debt ceiling, which stands at $14,300 billion.

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There are structural problems in the economy as growth slows and middle-class incomes stagnate. There are structural problems in the welfare state as baby boomers spend lavishly on themselves and impose horrendous costs on future generations. There are structural problems in energy markets as the rise of China and chronic instability in the Middle East leads to volatile gas prices. There are structural problems with immigration policy and tax policy and on and on.

As these problems have gone unaddressed, Americans have lost faith in the credibility of their political system, which is the one resource the entire regime is predicated upon. This loss of faith has contributed to a complex but dark national mood. The country is anxious, pessimistic, ashamed, helpless and defensive.

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[Here is the Bloomberg Headline: Swiss Franc Reaches Highest In At Least 40 Years Versus Dollar]

This is painful and sad and (go under the chart to the time box and click “max” all the way to the right) for an even longer term perspective check this out.

China needs to guard against volatility in US Treasury prices should investors demand higher returns from US government debt, a researcher at the Chinese central bank said on Monday.

Zhang Jianhua, a head of research at the People’s Bank of China, said worries that the heavily indebted US government may not repay its debt could drive Treasury yields higher and cause US debt prices to fluctuate.

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[MARK SHIELDS] I mean [the Republicans] want to go after the social programs. And each time, they take this election win as a mandate to do it, and they end up…

DAVID BROOKS: Well, but I can say, on the substance, they are right each time. I mean…

JIM LEHRER: You think it is courageous to do that?

DAVID BROOKS: Well, I mean, as I said, your average Medicare enrollee, average income, making I don’t know what it is, $50,000 a year, is paying in $145,000 over the lifetime into the system, taking out $450,000.

Well, there is a big gap there. And that is unsustainable. And so the $450,000 has to be brought down over time. And they are absolutely right to try to bring it down. It just happens to be extremely unpopular to try to talk about that.

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The U.S. dollar’s downward slide is accelerating as low interest rates, inflation concerns and the massive federal budget deficit undermine the currency.

With no relief in sight for the dollar on any of those fronts, the downward pressure on the dollar is widely expected to continue.

The dollar fell nearly 1% against a broad basket of currencies this week, following a drop of similar size last week. The ICE U.S. Dollar Index closed at its lowest level since August 2008, before the financial crisis intensified.

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“More than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures….”

–S&P credit analyst Nikola Swann in a statement today explaining why S and P shifted its outlook on America’s credit to “negative”

This is a timely reminder of the seriousness of America’s fiscal issues, for the country and for the rest of the world.

The continued failure to come up with a credible medium-term fiscal reform program would increase borrowing costs for all segments of US society, thereby undermining investment, employment and growth. It would also curtail foreigners’ appetite to add to their already substantial holdings of US assets. And it would weaken the dollar.

The US also risks eroding its standing at the core of the global monetary system.

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Shares on Wall Street opened sharply lower and Treasury prices fell on Monday after the Standard & Poor’s rating firm lowered the outlook for the United States to negative, saying that there was a risk that lawmakers might not reach agreement on how to address the country’s fiscal issues.

“More than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,” a credit analyst with Standard & Poor’s, Nikola G. Swann, said. At the same time, the firm affirmed the government’s AAA rating.

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S&P sees a “material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013; if an agreement is not reached and meaningful implementation is not begun by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer ‘AAA’ sovereigns.”

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…here’s the truth. Around two-thirds of our budget is spent on Medicare, Medicaid, Social Security, and national security. Programs like unemployment insurance, student loans, veterans’ benefits, and tax credits for working families take up another 20%. What’s left, after interest on the debt, is just 12 percent for everything else. That’s 12 percent for all of our other national priorities like education and clean energy; medical research and transportation; food safety and keeping our air and water clean.

Up until now, the cuts proposed by a lot of folks in Washington have focused almost exclusively on that 12%. But cuts to that 12% alone won’t solve the problem. So any serious plan to tackle our deficit will require us to put everything on the table, and take on excess spending wherever it exists in the budget. A serious plan doesn’t require us to balance our budget overnight ”“ in fact, economists think that with the economy just starting to grow again, we will need a phased-in approach ”“ but it does require tough decisions and support from leaders in both parties. And above all, it will require us to choose a vision of the America we want to see five and ten and twenty years down the road.

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In reality, finding a way to raise taxes may well be the central political problem facing the United States.

As countries become richer, their citizens tend to want more public services, be it a strong military or a decent safety net in retirement. This country is no exception. Yet our political culture is an exception. It has made most tax increases, even to pay for benefits people want, unthinkable.

This is where the Bush tax cuts come in. They have created a way for inertia to be fiscally responsible.

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The scale of America’s deficit and debt problem is staggering.

Thanks to an ageing population, exploding health care costs and inaction from both sides of politics, the Government Accountability Office now estimates that the United States is looking down the barrel of a $90 trillion fiscal gap over the next 75 years.

Treasury secretary Tim Geithner estimates that the US is adding about $125 billion of debt each month and the nation is expected to hit its $14.3 trillion debt ceiling in May.

Former treasury secretary James Baker describes the “debt bomb” as the number one problem for America.

“If we didn’t have the dollar as the de facto reserve currency of the world, we’d be Greece. I mean we are broke,” he exclaimed on CNN.

But doing something about it would take real gumption and the political cycle isn’t helping….

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The US lacks a “credible strategy” to stabilise its mounting public debt, posing a small but significant risk of a new global economic crisis, says the International Monetary Fund.

In an unusually stern rebuke to its largest shareholder, the IMF said the US was the only advanced economy to be increasing its underlying budget deficit in 2011, at a time when its economy was growing fast enough to reduce borrowing.

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Put aside the cruise brochures and let the garden retain that natural look for a few more years. Demography and declining investment returns are conspiring to keep you at your desk far longer than you ever expected.

This painful truth is no longer news in the rich world, and many governments have started to deal with the ageing problem. They have announced increases in the official retirement age that attempt to hold down the costs of state pensions while encouraging workers to stay in their jobs or get on their bikes and look for new ones.

Unfortunately, the boldest plans look inadequate. Older people are going to have to stay economically active longer than governments currently envisage; and that is going to require not just governments, but also employers and workers, to behave differently.

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The Republican budget released on Tuesday is a daring one in many ways. Above all, it would replace the current Medicare with a system of private health insurance plans subsidized by the government. Whether you like or loathe that idea, it would undeniably reduce Medicare’s long-term funding gap ”” which is by far the biggest source of looming federal deficits.

Yet there is at least one big way in which the plan isn’t daring at all. It asks for a whole lot of sacrifice from everyone under the age of 55 and little from everyone 55 and over. Representative Paul Ryan, the Wisconsin Republican who wrote the plan, calls the budget deficit an “existential threat” to the United States. Then he absolves more than one-third of all adults from responsibility in dealing with that threat.

This decision doesn’t make him unique in Washington. There is nearly a bipartisan consensus that any cuts to Medicare and Social Security should spare the baby boomers and the elderly. And, certainly, retirees or people on the verge of retirement shouldn’t have their benefits changed radically. But the consensus, like Mr. Ryan’s plan, goes too far.

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If you want to understand better why so many states””from New York to Wisconsin to California””are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?

Every state in America today except for two””Indiana and Wisconsin””has more government workers on the payroll than people manufacturing industrial goods.

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The above four multi-trillion-dollar liability balls are staggering in their implications. Remember first of all that the nearly $65 trillion of entitlement liabilities shown above are not some estimate of future spending. They are the discounted net present value of current spending should it continue at the projected demographic rate (importantly ­”“ it is much higher than the annual CPI + 1% used as a discounter because demand for healthcare rises much faster than inflation.) And while some Honorable Congressional Le Pews would counter that Medicaid is appropriated annually and therefore requires no discounted reserve, those words would surely count as “sweet nothings,” believable only to those whom they romance every several years at the polls. The incredible reality is that the $9.1 trillion federal debt that constitutes the next-to-tiniest ball in our chart is nothing compared to unfunded Medicaid and Medicare. It is like comparing Pluto to Saturn and Jupiter. The former (the $9.1 trillion current Treasury debt) does not even merit planetary status in our solar system of discounted future liabilities. It’s really just a large asteroid.

Look at it another way and our dire situation becomes equally revealing. Suppose that the $65 trillion of entitlement liabilities were fully funded in a “lockbox,” much like Social Security is falsely imagined to be. Just suppose. And say the cost of that funding (Treasury debt) was the same CPI + 1% that was used to produce the above discounted present value in the first place. Actually, that’s not a bad guesstimate for the average yield of all Treasury debt. If so, then the interest expense on the $75 trillion total debt would equal $2.6 trillion, quite close to the current level of entitlement spending for Social Security, Medicare and Medicaid. What do we pay now in interest? About $250 billion. Our annual “lockbox” tab would rise by $2.35 trillion and our deficit would be close to 15% of GDP! The simple conclusion would be this: Unless you want to drastically reduce entitlement spending or heaven forbid raise taxes, then Pepé, you’ve got a stinker of a problem.

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The President’s difficulties in positioning himself as the champion of a jobs renaissance were compounded by two new reports on the nation’s fiscal condition, one by the Congressional Budget Office (CBO), another by the General Accountability Office (GAO).

The CBO analysed the President’s proposed budget for the next fiscal year and estimates the federal deficit over the next decade will clock in at $9.5 trillion (£5.8tr), a mere $2.3 trillion (£1.4tr) higher than the White House estimate. And the GAO, re-assessing the nation’s long-term outlook, concluded that the fiscal situation has deteriorated. If the nation’s debt is to be stabilised at 62% of GDP, an immediate tax increase of 15%, or a spending cut of 13%, or some combination of the two is needed.

The Peter G Peterson Foundation, a sort of budget watchdog and nag, concludes that even under a set of optimistic assumptions, “large and persistent deficits still lead to an unsustainable growth in debt… and a steady growth in net interest payments to service this growing debt”. By 2030, unless the President and Congress come to grips with the fiscal situation, net interest payments and entitlements (pensions, healthcare costs) will consume almost the entire budget, leaving nothing for spending on defence, education and other programmes.

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Nearly three in four Americans (71%) say they worry about the economy “a great deal,” more than worry about 13 other issues Gallup measured in a March 3-6 poll. Nearly two in three (64%) worry a great deal about federal spending and the budget deficit. Americans show the least anxiety about race relations — the only issue about which the majority is “only a little” or “not at all” concerned.

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A new assessment of President Barack Obama’s budget released Friday says the White House underestimates future budget deficits by more than $2 trillion over the upcoming decade.

The estimate from the nonpartisan Congressional Budget Office says that if Obama’s February budget submission is enacted into law it would produce deficits totaling $9.5 trillion over 10 years — an average of almost $1 trillion a year.

Obama’s budget saw deficits totaling $7.2 trillion over the same period.

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The plight of the mentally ill in South Carolina is more severe than most other states, according to a report released Wednesday by National Alliance on Mental Illness. The report, called “State Mental Health Cuts: A National Crisis,” shows that South Carolina ranks third in the nation for the level of budget cuts made to mental health services between 2009 and 2011. South Carolina’s state mental health budget was cut 23 percent, behind only Kentucky with a 47 percent cut and Alaska with a 35 percent cut.

Nationwide, state mental health spending was slashed by more than $1.8 billion in the last two years, not including changes in services provided by Medicaid. Tens of thousands of children and adults living with serious mental illness have been denied community- and hospital-based psychiatric care, housing and access to medications, according to the findings.

But by 2009, things already were bad in South Carolina. Lawmakers began handing down steep budget cuts to the mental health community a year earlier, and even more cuts are on the way now. A draft budget before the House next week would cut the Department of Mental Health by another 6 percent in the upcoming fiscal year.

Read it all from the front page of the local paper.

As expected, the U.S. Senate failed Wednesday to advance either the House Republicans’ spending bill or an alternative proposal offered by Democrats, leaving lawmakers just nine days to work on a compromise plan or face a government shutdown.

Neither plan achieved even a simple majority of support in the chamber. The vote in the Senate was 56-44 against the plan approved by the Republican-led House last month, which would cut current spending levels by $61 billion. A subsequent vote on the alternate proposal from Senate Democrats, which offers cuts of $6.5 billion, failed 58-42. Sixty votes were needed to advance the measures.

The vote comes as President Obama faces new pressure to exert greater influence over the congressional debate. As the Senate readied for votes on the competing measures Tuesday, freshman Democrat Sen. Joe Manchin (W.Va.) accused both parties of engaging in “political theater.”

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Jason’s Lake is a focal point of the state’s extraordinarily popular Botany Bay Wildlife Management Area, a 50-acre saltwater pool roamed by trophy fish, a catch-and-release haven open to adults when they bring children.

It’s one of the signature habitats that make the recently opened management area the most visited in the state, by far. More than 40,000 people turn out each year to wander the lake, woods, creek, salt marshes and maritime forest beach on Edisto Island, right at the edge of the Charleston suburbs.

“It’s treated almost like a state park,” said Phil Maier, coastal reserves director with the S.C. Department of Natural Resources.

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