Posted on 01/06/2013 1:26:02 PM PST by Libloather
Wanna scare somebody about America's debt on the eve of the Fiscal Cliff? I mean, really scare somebody? Here's a trick. Don't talk about the debt. Talk about "unfunded liabilities."
The U.S. national debt comes out to about $16 trillion today. That's something. But it's nothing compared to the extra $87 trillion in unfunded liabilities to Social Security, Medicare, and federal pensions. Here's how that works. If you add up all of the U.S. government's promises to pay retirement and health care benefits for the next 75 years and subtract the projected tax revenue dedicated to those programs over the next 75 years, there is a gap. A $87 trillion gap -- in addition to a $16 billion hole.
"Why haven't Americans heard about the titanic $86.8 trillion liability from these programs?" Chris Box and Bill Archer ask in the Wall Street Journal. The authors blame the U.S. government for using shoddy accounting and for misleading the American public on their finances. In fact, the most misleading thing about that $87 trillion is the way the figure is often used in the media.
(Excerpt) Read more at theatlantic.com ...
12/30/12 - Mort Zuckerman: Brace For an Avalanche of Unfunded Debt
11/27/12 - Oh, About Those Unfunded Liabilities
11/05/12 - Fiscal Cliff: Liability for unfunded liabilities equals $1,058,193 per taxpayer!
6/07/11 - US Government Now Owes $61.6 TRILLION in Unfunded Mandates
12/20/10 - $24.5 Trillion In US National Debt, $144 Trillion In Unfunded Liabilities In... 2015
Repayment is a pipe dream. Insanity.
It’s gonna crash so hard.
Why don’t they tell us about these unfunded liabilities? Simple. They’re not real. You see, they are just promises to pay in the future. When push comes to shove the government can and will just wave a magic wand and these liabilities all go away. People will suffer but since when does big government care about that? Besides, what are they going to do, sue? Right.
That’s called a Jubilee, and I am convinced that it is going to happen. Wave the magic wand and cancel all the debts. Tough medicine indeed — but there is no Plan B.
Throw in the trillions of dollars that other countries owe the US.
Even if everybody were willing to settle for just getting the principle back, it will take 200 years to right itself.
This Ponzi scheme makes the Madoff scheme look like peanuts!
The question is “How fast and hard will it fall?”
I think the fact that the government is purchasing bulk ammunition and trying to take guns from the populace says it is close.
Even with a Jubilee the system collapses as the government can no longer give out money to freeloaders.
I agree.
Truth be told, I think people around the world have been sold a bill of goods for several centuries — the USA was slow to adopt the erroneous idea, but we have now bought into it as well.
The idea is: National government can solve all problems. The nation-state is just as good as God. More government is better government.
I want the system to crash really, really hard. So that for 1000 years, anytime a politician rises up and tells a crowd, “I will give you things”, the crowd will immediately rise up and put his head on a pike.
They don't happen.
Make it more like $150 trillion.
There’s not enough money or assets in the world to pay this off. They’ve destroyed us—intentionally.
Wanna know what’s scarier?
You’re starting to see a class of politician now who basically think the debt does not matter. Indeed, its a “good thing” because the debt creates jobs. Or, per Hilda Solis (Sec Labor) that the unemployment rate does not matter, because the unemployed “create millions of jobs”. And too many Americans are so dumb or co-opted that they can’t see the issue.
Up is down. Day is night. Slavery is freedom.
That’s called a Jubilee, and I am convinced that it is going to happen. Wave the magic wand and cancel all the debts. Tough medicine indeed — but there is no Plan B.
I think you are very astute. :)
Yes, our future unfunded promises are impossibly huge. This is made even more egregious because government is borrowing to fund present spending with no intention of ever repaying. The net result is that we have allowed ourselves to be placed in permanent servitude to service this debt.
The land of the free has sold themselves into serfdom.
The only reservation I have to the claims about the size of the future unfunded debt is that they don’t net out that debt by any income or payments, however small they may be.
This particularly applies to unfunded future obligations of Social Security, a program that receives the FICA wage tax.
You see it, but you do not see it.
After the Jubilee, everything IS different. Sure, the politicians want to borrow more money, they want to make more promises, and they want to bribe people some more.
But they CAN’T.
Because they just screwed all the lenders. So now it’s “cash on the barrel head” for anything a politician might want to do and in the midst of a crash and the aftermath of the crash, the government is absolutely powerless to do much or to make promises.
You want Limited Government?? That’s pretty darn limited — because everyone will know that the government is good for nothing.
Honestly, I don’t think it will happen like that. Indeed it can’t happen like that because the Government (including the Federal Reserve) owns the printing press. They can continue to print dollars to “meet” their obligations, but those dollars will be worth increasingly less.
Or will they? The farce will keep going for quite some time because, as the author states, ALL the Central Banks are playing the same game: they are buying their own bonds with $$ created out of thin air. But since they are all doing it, the risks are lessened. They are doing it for one reason: to stave off social upheaval.
— For the West (including Japan): Too much debt, too many promises, and too high a standard of living. Aside from Germany and Japan, there is not enough industry to provide a living for everyone. So the Government has a bigger and bigger role in employment and entitlements keep the rest of the population fed & docile. They play along because if there will be massive social upheaval if Government spending is actually cut to sustainable levels.
— For the East (particularly China): They need to grow, so they need to export. They play along because the alternative is massive unemployment and, likewise, social upheaval. Also, even while its Monopoly $$, it helps them catch up with the West from a military/technological standpoint.
— For the Oil Producers: They are in the same boat. The minute the petrol dollars stop, they will have to contend with their own restive populations
So, really, everyone has almost no choice but to play along.
It's rather like saying that if great great grandpa had deposited $10 in the bank in 1830 you'd be a millionaire today ~ but you're not a millionaire.
Actuaries do a bit better. Plus, some investment analysts have been sufficiently well versed in technological change they've successfully anticipated DEFLATION and negative interest rates over time.
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