We are behind the compound interest eight ball.
Posted on 12/12/2014 12:18:03 PM PST by Rusty0604
Exactly 199 years ago, in 1815, a “temporary” committee was established in the US Senate called the Committee on Finance and Uniform National Currency.
It was set up to address economic issues and the debt accrued by the US government after the War of 1812.
Of course, because there’s nothing more permanent than a temporary government measure, the committee became a permanent one after just one year.
It soon expanded its role from raising tariffs to having influence over taxation, banking, currency, and appropriations.
In subsequent wars, notably the American Civil War, the Committee was quick to use its powers and introduced the union’s first income tax. They also detached the dollar from gold to help fund the war.
This was all an indication of things to come.
Over the subsequent decades there was a sustained push to finally establish the country’s central bank that will control money and credit, as well as institute a permanent income tax to feed the expanding aspirations of government.
They succeeded in 1913 when the Federal Reserve Act was passed and the 16th Amendment ratified, binding the country in the shackles of central banking and taxation of income.
Over the century that followed, the US has gone from being the biggest creditor in the world to its biggest debtor.
Decades of expanding government programs, waste, endless and costly wars, etc. have racked up such an enormous pile of debt that it has become almost impossible to pay it down.
A lot of folks don’t realize that, since the end of World War II, the US government’s total tax revenue has been almost constant at roughly 17% of GDP.
In other words, even though the actual tax rates themselves rise and fall, the government’s ‘slice’ of the economic pie is almost always the same - 17%.
I’ve worked out a mathematical model which shows that, even with absurd assumptions (7%+ GDP growth for years at a time, low interest rates, etc.), it is simply not feasible for the US government to ‘grow’ its way out.
Default has become the only option. And that could mean a number of things.
They could default on their creditors (other governments like China who loaned money to the US government). But this would spark a global financial and banking crisis.
They could default on the Federal Reserve, which owns trillions of dollars of US debt. But this would create an epic currency crisis for the US dollar.
They could also default on their obligations to their citizens—primarily to future beneficiaries of Social Security (who collectively own trillions of dollars of US debt).
Or they could choose to default on their obligations to every human being alive who holds US dollars… and engineer rampant inflation.
None of these is a good option. And simply put, the US government has reached a point of no return.
I aim to demonstrate this to you in today’s video podcast episode. It’s a very sobering realization.
Join me to see it for yourself:
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And this president is responsible for 11 trillion of the 17? 18? trillion in debt.
He obviously intentionally ran it up in order to make paying it off impossible.
Just have to work the printing presses harder.
We are behind the compound interest eight ball.
A hole too deep to climb out of ... by design.
If the country had the will, it could be paid down. But it would mean bringing industries back here so as many as possible could work and it would also mean freezing many gov programs (ie social security, medicare/medicaid/obamacare ) which would not be popular.
but...
but.. we still get the free s__t, right?
“There are two ways to conquer and enslave a nation. One is by the sword and the other is by debt.”
— John Adams, 1826
That would of course be option 4. That would be good for property owners with fixed interest loans, any fixed interest debt. Bad for any new purchases, i.e. ‘food’, ‘energy’ products commodities in general. If you’ve got 1 year of food socked away and high fixed debt inflation is good for you, bad for everyone else.
“The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”
— Thomas Jefferson, letter to John Taylor, 1816
“[With the decline of society] begins, indeed, the bellum omnium in omnia [war of all against all], which some philosophers observing to be so general in this world, have mistaken it for the natural, instead of the abusive state of man. And the fore horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression.”
— Thomas Jefferson to Samuel Kercheval, 1816
“To preserve independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers.”
— Thomas Jefferson, to Samuel Kercheval, 1816
When our supposed representatives continue to spend borrowed money, money that this generation cannot possibly repay, they are enslaving our grandchildren economically. They are robbing them of their God-given, unalienable right to government by consent. And remember, these are all representatives who have been required to swear a sacred oath to support and defend the Constitution of the United States, a document whose highest stated purpose is ‘to secure the Blessings of Liberty to Posterity.’ What they should be securing, they are obliterating
It may not be politically possible, but how would it be mathematically impossible to start walking back entitlements, reducing the bureaucracy, to balance the budget, then start paying down the debt as surpluses grow?
The only way this ends is a collapse, which allows capitalism to grow again, free of most regulations and free of most taxes.
It will take a collapse for this to be allowed. The 9/11 trade tower collapse is both precursor and metaphor.
Default on all foreign held debt and pay off American held debt with deeds to Federal owned land.
There is an old Peanuts strip where Linus asks Lucy why mountain climbers are always tied together.
Lucy explains that it’s “so that if one falls, they ALL fall.”
It’s for that reason that the debt will never be repaid. And it really will not matter.
Borrowing money to pay down the debt is tricky business, especially when lack of inflation isn’t allowing more worthless money to pay for the worthmore money that was borrowed.
This country needs a thorough enema to clean out the social and economic engineers driving it towards certain death.
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