Medicare faces unpayable liability of $38.6T

It should be interesting to see how the government plans on paying—or not paying—for Medicare in future years.

The unfunded liability, which is the amount of money the government will have to come up with to cover benefits promised to Americans, is $38.6 trillion. That breaks down to over $328,000 per household in the United States.

So where is the money going to come from?

The government has a current budget deficit of $1.5 trillion—meaning that it is spending $1.5 trillion more than it takes in each year. And it has federal debt of $15.6 trillion. And somehow, it has to start coming up with hundreds of billions more per year to cover Medicare as the baby boomers begin retiring en masse.

With the economy in the dumps and China and India economically eating our lunch, it isn’t going to happen.

Making matters worse, the Medicare shortfall analysis by Medicare Trustees says there is “a significant likelihood” that the projected expenditures are substantially understated as a result of the way the Medicare guidelines are written.

$38.6 trillion and that might be understated!

There is a crisis looming for millions of Americans—because American leaders have bankrupted the nation.

The government also has looming multitrillion-dollar shortfalls related to Social Security and Medicaid.

The government has only three choices. Raising taxes: Taxes will be raised, but the amount required to cover the looming liabilities would easily send the nation into the next Great Depression. So that probably won’t happen. The government is not even able to cover its current budget deficit by raising taxes.

Then there is cutting services. This will likely happen. If you are relying on Medicare, expect the amount of coverage to be seriously cut back.

There is also a third option for the government. It is also the most likely—and potentially the most economically disastrous option. But the government will do it because it is the most politically expedient option.

To learn what the government has in store for you, read “The Real Plan to Pay Off the Debt.”