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Obama inherited a fiscal disaster. Now what?

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If this weren't bad enough, President Bush's financial legacy is marred by other fundamental problems. Bush's team borrowed more than $1 trillion from the Social Security "trust fund" and seemed to spend it on everything except Social Security. Like Blanche DuBois in Tennessee Williams's "Streetcar Named Desire," Social Security now depends on the kindness of strangers – namely, future taxpayers and foreign lenders.

Worse, the Bush administration refused to tell the public about the extraordinary underfunding or overpromising of our major entitlement programs. According to an audited Treasury report, Medicare is $34 trillion in the hole and Social Security is another $13 trillion. We don't even know how to measure Medicaid's problems, but some estimates put the shortfall around $30 trillion. To put this in perspective, the entire fiscal gap for America is at least four times as great as our total annual gross domestic product.

The US Treasury's Financial Report of the US Government is the key document for understanding these problems because it is the only place where Uncle Sam uses real accounting and audited numbers, just as every major company, charity, or state or local government is required to do by law. It is released every Dec. 15, and is available on the Treasury website. Until now, you have probably never heard of the Financial Report.

To its credit, the Obama White House has added a link to the Financial Report on its website, a step the Bush administration never took. The report will tell you that the per capita share of America's total obligations, including entitlements, is more than $184,000 each. The typical American family's share is roughly half a million dollars.

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