Reality Check: Money Does NOT Grow on Trees

We've all seen numbers like billion and trillion thrown around recently and unless you own a billion or trillion dollars, the reality of it probably doesn't set in. I saw a graphic not long ago that puts these numbers in perspective and I couldn't remember if I had posted it anywhere. In case I didn't, I'm doing it now.

Pagetutor.com, using Google Sketchup, created a graphic showing the progression from a $100 bill to $1 trillion. Eye opening to say the least. As a follow up, Pagetutor created a graphic showing the size of the US debt ($11 trillion when the graphic was created).

I tried posting the graphics themselves, but they are too big to fit on my blog, so you'll just have to click on the links to see them for yourselves.

Now that I've gotten your attention, let's get to work.

The US economy, measured in terms of gross domestic product, was worth about $14.4 trillion in 2008. GDP is a basic measure of a country's economic performance and is the market value of all final goods and services made within the borders of a nation in a year.

In July of this year, the US national debt was measured at $11.6 trillion. So, logically you might assume the US has a net worth of $2.8 trillion, except that you'd be wrong.

If you are alive and breathing, you are well aware of the debate over reforming the health care system. As most of you know, the US already has government run health care in place for certain portions of the population, namely Medicare and Medicaid. And everyone has heard that these programs are in the hole. What you may not know is by how much these programs are in the hole.

According to the National Center for Policy Analysis, the 2009 Social Security and Medicare Trustees Reports show the unfunded liability of Medicare has reached more than $89 trillion in today's dollars! The unfunded liability is the difference between the benefits that have been promised to current and future retirees and what will be collected in dedicated taxes and Medicare premiums. I wish Pagetutor.com had a graphic for this, but I couldn't find one. Just take the $11 trillion graphic above and multiply it by 8 in your mind.

The question is, if the government has run Medicare into the ground to the tune of $11 trillion in unfunded promises, should we trust the government with health care for all? I think the answer is pretty clear.