HOW BIG IS THE GOVERNMENT'S DEBT?

NATIONAL CENTER FOR POLICY ANALYSIS
By Andrew J. Rettenmaier
Brief Analysis - No. 402
Friday, June 21, 2002
Source

Reports about the enormous federal debt abound, as do dire predictions about the impact of that debt on future generations. But just how big is the debt?

If we use the most common definition -- the sum total of all outstanding bonds held by the public -- the federal government debt stood at $3.3 trillion at the end of 2001. That amounts to $11,657 for each American. However, this explicit debt measure does not reflect the full magnitude of what the government owes. Looming just over the horizon -- and wholly ignored by current measures -- are the accumulated obligations to pay Medicare and Social Security benefits to the baby boom generation and other current program participants. Although not officially reported as debts, these implicit commitments dwarf the debt held by the public.

The entitlement (or implicit) debt considered in this analysis includes only Social Security and Medicare. It indicates the total value of all the benefits earned up to the present day by each person who has earned benefits from both programs by working in the labor market and paying payroll taxes.

Note that Medicare's accumulated obligations are larger than Social Security's. This might seem unusual to the casual observer, since Social Security annual expenditures for the foreseeable future are larger than the annual expenditures for Medicare. The reason why Medicare obligations exceed Social Security obligations is that it is easier to qualify for Medicare. To qualify for full Medicare benefits, individuals need only contribute for 10 years. By contrast, individuals who contribute to Social Security for 10 years qualify for only minimum Social Security benefits. As individuals work more years - and contribute more taxes - their Social Security benefits increase. The total debt calculation does not anticipate what additional taxes will be paid or benefits earned in the future. Instead, it looks at past earnings and program participation to determine what benefits have been earned up to the present day.

Note also that the liabilities depicted in Figure I are "unfunded" liabilities, in the sense that no funds have been put aside to pay for them. Currently, revenues from the (FICA) payroll tax are used to pay all the expenses of Social Security and some of the expenses of Medicare. When payroll tax revenues have exceeded benefit payments, the surplus has been used to fund other government programs, and more recently to pay down the government's explicit debt. No funds have been put aside to pay for future benefits. Nothing has been invested and nothing has been saved that is dedicated to Social Security and Medicare.

The accrued obligations of both Social Security and Medicare are significant. How will these debts be paid? By 2017, payroll tax revenues collected from workers will not be enough to pay full benefits. Thus, the tax rate needed to support Social Security and Medicare will necessarily grow continuously into the future. Today the payroll tax rate for Social Security retirement and disability insurance is 12.4 percent.

Will future taxpayers, many of whom are not yet born, be willing to pay these high tax rates with no assurance that their own benefits will be paid when they retire?

Another way to think about the debt is shown in [Figure II below], which demonstrates how the debt changes over time. This alternative measure nets out future tax payments from anticipated benefits for all program participants in a given year.

It is often noted that the government debt grew substantially during the presidency of Ronald Reagan. This statement is misleading. The explicit public debt did increase between 1980 and 1988 - from 26.1 percent of Gross Domestic Product (GDP) to 40.9 percent. However, based on the alternative measure of Social Security's unfunded obligations, over the same period implicit Social Security debt actually fell - because of the reforms adopted in 1983. As a result, the combined Social Security and explicit government debt fell from 232 percent of GDP in 1980 to 157.5 percent of GDP in 1988. Thus the combined government debt was reduced by 32 percent - almost one-third - during Ronald Reagan's term in office.

During the presidency of George H.W. Bush, the combined debt rose from 156.3 percent to 172.08 percent of GDP. By the end of the Clinton presidency, in 2000, the combined debt had fallen to 135.52 percent of GDP.

As history shows, promises to fund entitlement benefits are subject to the will of Congress. Yet it is important to keep track of those promises. Measuring implicit entitlement debt serves two important purposes. First, it more accurately shows what promises the federal government has made to current workers and retirees and assigns a cost to the commitments. Second, it clearly demonstrates to policy makers how decisions to increase or decrease entitlement benefits will impact current and future generations.

Andrew J. Rettenmaier is an NCPA senior fellow and the executive associate director of the Private Enterprise Research Center at Texas A&M University. The analysis is based on "Meaningful Measures of Fiscal Deficit and Debt" coauthored with Liqun Liu and Thomas R. Saving.

How Big Is the Government's Debt? "When these obligations are combined with the debt held by the public, the total burden equals $33.1 trillion, or 10 times the official debt measure. This "total debt" is more than three times the size of the nation's total output in 2001, and amounts to $116,381 for every man, woman and child in America."

"If the American People ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property, until their children will wake up homeless on the continent their fathers occupied. The issuing of money should be taken from the banks and restored to Congress and the people to whom it belongs."
Thomas Jefferson

"The burden of debt is as destructive to freedom as subjugation by conquest."
Benjamin Franklin

SECRETS OF THE FEDERAL RESERVE
On September 30, 1941, before the same Committee, Governor Eccles was asked by Representative Patman:

"How did you get the money to buy those two billion dollars worth of Government securities in 1933?

MR. PATMAN: And there is nothing behind it, is there, except our Government’s credit?

ECCLES: That is what our money system is. If there were no debts in our money system, there wouldn’t be any money."

ECCLES: "I mean the Federal Reserve, when it carries out an open market operation, that is, if it purchases Government securities in the 167 open market, it puts new money into the hands of the banks which creates idle deposits.

ECCLES: Whenever the Federal Reserve System buys Government securities in the open market, or buys them direct from the Treasury, either one, that is what it does.

DEWEY: What are you going to use to buy them with? You are going to create credit?

ECCLES: That is all we have ever done. That is the way the Federal Reserve System operates.

ECCLES: I mean the bank creating money by the purchase of Government securities. All is created by debt--either private or public debt.

FLETCHER: Chairman Eccles, when do you think there is a possibility of returning to a free and open market, instead of this pegged and artificially controlled financial market we now have?

How Big Is the Government's Debt?
"When these obligations are combined with the debt held by the public, the total burden equals $33.1 trillion, or 10 times the official debt measure. This "total debt" is more than three times the size of the nation's total output in 2001, and amounts to $116,381 for every man, woman and child in America."

"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. ME 15:40

Thu Jul 18 07:42:14 2002

Mark Sonnenblick
US Can't Pay Its Debts - It Is Hopelessly Bankrupt
Wed Jul 17 21:03:10 2002

http://www.rense.com/general27/hopeless.htm" The US Can't Pay Its Debts - It Is Hopelessly Bankrupt
By Mark Sonnenblick
PressStaff@LaRouchePub.com
Executive Intelligence Review 7-16-2
http://www.rense.com/general27/hopeless.htm

This will be one of the topics of Jeff's radio program on Tuesday, July 16 with EIR editor Lonnie Wolfe.

Many people who had believed that there could be an upturn in the U.S. economy lost their delusions after reading a study which appeared in the July 5 EIR, especially after seeing its dramatic graphics. They realized that the U.S.A. is hopelessly bankrupt. Nobody before put together such a comprehensive study of the size of the debt, how it came about, and the impossibility of paying it. EIR economists Richard Freeman and John Hoefle gently walk the reader through how they added up statistics on household debt, corporate debt, and government debt. Freeman spoke with a dozen statisticians inside the Federal Reserve and other public and private entities, who provided data on separate pieces of this bubble, and who sometimes thought EIR's calculations were "too conservative."

A free copy of the whole July 5 EIR will be sent to anyone who calls
1-888-347-3258 and says "I saw it on Rense.com."

The study begins:

The spiralling growth in U.S. debt, and thus the requirement to service or roll over the debt, is creating the conditions, in the United States and globally, for the eruption of a hyperinflation of the type that ravaged Weimar Germany from March through November 1923. By the end of 2001, total U.S. debt had reached $31.12 trillion. On average, over the last four years, U.S. debt has surged at the rate of $2.2 trillion per year, or almost $200 billion per month.

The debt pyramid has grown so large, that it is unsustainable, and all attempts to service it will not work. Moreover, every such attempt further destroys both the underlying U.S. physical economy, and its bankrupt financial system. EIR's economics staff has determined, preliminarily, that by the end of 2001, on this outstanding debt, America's annual debt service--the interest payment, plus re-payment of a portion of the principal--had reached an unprecedented $7.36 trillion. This is equivalent to a staggering 72.1% of Gross Domestic Product....
=================================================================
United States Congressional Record, March 17, 1993 Vol. 33, page H-1303
Speaker-Rep. James Traficant, Jr. (Ohio) addressing the House:

"Mr. Speaker, we are here now in chapter 11.. Members of Congress are official trustees presiding over the greatest reorganization of any Bankrupt entity in world history, the U.S. Government. We are setting forth hopefully, a blueprint for our future. There are some who say it is a coroner's report that will lead to our demise.
GO HERE FOR FULL STORY:
http://www.apfn.net/DOC-100_bankruptcy.htm
============================================================================
TO WATCH C-SPAN COVERAGE GO HERE... CHECK LIST ON RIGHT SIDE OF PAGE:
THE MOST IMPORTANT IS EVENING SESSION PART 2
http://www.cspan.org/capitolspotlight/

C-SPAN COVERAGE OF: Rep. James Traficant, (D-Ohio)
Political Targeting:bills.

Subject: .The Bankruptcy of The United States
United States Congressional Record, March 17, 1993 Vol. 33, page H-1303
THIS IS IMPORTANT!!!!
Speaker-Rep. James Traficant, Jr. (Ohio) addressing the House:

"Mr. Speaker, we are here now in chapter 11.. Members of Congress are
official trustees presiding over the greatest reorganization of any Bankrupt
entity in world history, the U.S. Government. We are setting forth
hopefully, a blueprint for our future. There are some who say it is a
coroner's report that will lead to our demise.

It is an established fact that the United States Federal Government has
been dissolved by the Emergency Banking Act, March 9, 1933, 48 Stat. 1,
Public Law 89-719; declared by President Roosevelt, being bankrupt and
insolvent. H.J.R. 192, 73rd Congress m session June 5, 1933 - Joint
Resolution To Suspend The Gold Standard and Abrogate The Gold Clause
dissolved the Sovereign Authority of the United States and the official
capacities of all United States Governmental Offices, Officers, and
Departments and is further evidence that the United States Federal
Government exists today in name only.

The receivers of the United States Bankruptcy are the International
Bankers, via the United Nations, the World Bank and the International
Monetary Fund. All United States Offices, Officials, and Departments are now
operating within a de facto status in name only under Emergency War Powers.
With the Constitutional Republican form of Government now dissolved, the
receivers of the Bankruptcy have adopted a new form of government for the
United States. This new form of government is known as a Democracy, being an
established Socialist/Communist order under a new governor for America. This
act was instituted and established by transferring and/or placing the Office
of the Secretary of Treasury to that of the Governor of the International
Monetary Fund. Public Law 94-564, page 8, Section H.R. 13955 reads in part:
"The U.S. Secretary of Treasury receives no compensation for representing
the United States."

Gold and silver were such a powerful money during the founding of the
united states of America, that the founding fathers declared that only gold
or silver coins can be "money" in America. Since gold and silver coinage
were heavy and inconvenient for a lot of transactions, they were stored in
banks and a claim check was issued as a money substitute. People traded
their coupons as money, or "currency." Currency is not money, but a money
substitute. Redeemable currency must promise to pay a dollar equivalent in
gold or silver money. Federal Reserve Notes (FRNs) make no such promises,
and are not "money." A Federal Reserve Note is a debt obligation of the
federal United States government, not "money?' The federal United States
government and the U.S. Congress were not and have never been authorized by
the Constitution for the united states of America to issue currency of any
kind, but only lawful money, -gold and silver coin.
It is essential that we comprehend the distinction between real money and
paper money substitute. One cannot get rich by accumulating money
substitutes, one can only get deeper into debt. We the People no longer have
any "money." Most Americans have not been paid any "money" for a very long
time, perhaps not in their entire life. Now do you comprehend why you feel
broke? Now, do you understand why you are "bankrupt," along with the rest of
the country?

Federal Reserve Notes (FRNs) are unsigned checks written on a closed
account. FRNs are an inflatable paper system designed to create debt through
inflation (devaluation of currency). when ever there is an increase of the
supply of a money substitute in the economy without a corresponding increase
in the gold and silver backing, inflation occurs.

Inflation is an invisible form of taxation that irresponsible governments
inflict on their citizens. The Federal Reserve Bank who controls the supply
and movement of FRNs has everybody fooled. They have access to an unlimited
supply of FRNs, paying only for the printing costs of what they need. FRNs
are nothing more than promissory notes for U.S. Treasury securities
(T-Bills) - a promise to pay the debt to the Federal Reserve Bank.
There is a fundamental difference between "paying" and "discharging" a
debt. To pay a debt, you must pay with value or substance (i.e. gold,
silver, barter or a commodity). With FRNs, you can only discharge a debt.
You cannot pay a debt with a debt currency system. You cannot service a debt
with a currency that has no backing in value or substance. No contract in
Common law is valid unless it involves an exchange of "good & valuable
consideration." Un-payable debt transfers power and control to the sovereign
power structure that has no interest in money, law, equity or justice
because they have so much wealth already.

Their lust is for power and control. Since the inception of central
banking, they have controlled the fates of nations.

The Federal Reserve System is based on the Canon law and the principles of
sovereignty protected in the Constitution and the Bill of Rights. In fact,
the international bankers used a "Canon Law Trust" as their model, adding
stock and naming it a "Joint Stock Trust." The U.S. Congress had passed a
law making it illegal for any legal "person" to duplicate a "Joint Stock
Trust" in 1873. The Federal Reserve Act was legislated post-facto (to 1870),
although post-facto laws are strictly forbidden by the Constitution. [1:9:3]
The Federal Reserve System is a sovereign power structure separate and
distinct from the federal United States government. The Federal Reserve is a
maritime lender, and/or maritime insurance underwriter to the federal United
States operating exclusively under Admiralty/Maritime law. The lender or
underwriter bears the risks, and the Maritime law compelling specific
performance in paying the interest, or premiums are the same.

Assets of the debtor can also be hypothecated (to pledge something as a
security without taking possession of it.) as security by the lender or
underwriter. The Federal Reserve Act stipulated that the interest on the
debt was to be paid in gold. There was no stipulation in the Federal Reserve
Act for ever paying the principle.

Prior to 1913, most Americans owned clear, allodial title to property, free
and clear of any liens or mortgages until the Federal Reserve Act (1913)
"Hypothecated" all property within the federal United States to the Board of
Governors of the Federal Reserve, -in which the Trustees (stockholders) held
legal title. The U.S. citizen (tenant, franchisee) was registered as a
"beneficiary" of the trust via his/her birth certificate. In 1933, the
federal United States hypothecated all of the present and future properties,
assets and labor of their "subjects," the 14th Amendment U.S. citizen, to
the Federal Reserve System.

In return, the Federal Reserve System agreed to extend the federal United
States corporation all the credit "money substitute" it needed. Like any
other debtor, the federal United States government had to assign collateral
and security to their creditors as a condition of the loan. Since the
federal United States didn't have any assets, they assigned the private
property of their "economic slaves", the U.S. citizens as collateral against
the un-payable federal debt. They also pledged the unincorporated federal
territories, national parks forests, birth certificates, and nonprofit
organizations, as collateral against the federal debt. All has already been
transferred as payment to the international bankers.

Unwittingly, America has returned to its pre-American Revolution, feudal
roots whereby all land is held by a sovereign and the common people had no
rights to hold allodial title to property. Once again, We the People are the
tenants and sharecroppers renting our own property from a Sovereign in the
guise of the Federal Reserve Bank. We the people have exchanged one master
for another.

This has been going on for over eighty years without the "informed
knowledge" of the American people, without a voice protesting loud enough.
Now it's easy to grasp why America is fundamentally bankrupt.

Why don't more people own their properties outright?

Why are 90% of Americans mortgaged to the hilt and have little or no assets
after all debts and liabilities have been paid? Why does it feel like you
are working harder and harder and getting less and less?

We are reaping what has been sown, and the results of our harvest is a
painful bankruptcy, and a foreclosure on American property, precious
liberties, and a way of life. Few of our elected representatives in
Washington, D.C. have dared to tell the truth. The federal United States is
bankrupt. Our children will inherit this un-payable debt, and the tyranny to
enforce paying it.

America has become completely bankrupt in world leadership, financial
credit and its reputation for courage, vision and human rights. This is an
undeclared economic war, bankruptcy, and economic slavery of the most
corrupt order! Wake up America! Take back
your Country."

[   IS IT ANY WONDER THAT THE "ELITE" ARE OUT TO DESTROY REP TRAFICANT? He
is hitting the Socialist CFR/TC and the Communist UN where it hurts! LMsr. ]

Image: United States Congressional Record, March 17, 1993 Vol. 33, page H-1303

Added by: Chester L McWhorter Sr: Forming the Federal Reserve System are the
primary Federal Reserve "Banks" of: Boston, New York, Philadelphia,
Cleveland, Richmond, Atlanta, Chicago, St Louis, Minneapolis, Kansas City,
Dallas, and San Francisco. These banks are not real banks..you cannot cash a
check there, open an account, etc. These "banks" are also holding companies
of smaller banks.
In all of this discussion about income tax, we should be ever mindful of the
fact that CONGRESS is the key. CONGRESS votes to spend the money. Congress
gives the IRS its power. Congress gives the IRS its OWN budget. Congress is
elected by the people. The IRS is A DECOY.

             >>>>Disclaimer: This document may be used as you will except:
If you change anything in the text, remove my name and other Ident. You may
use it without my identification also if you wish...I only ask that people
read it and think...think...think. Sources/Ref's if not in the text will be
found on the last page of Doc 000.0.0.1 and 000.0.6. CLMsr.<<<<
We have a Constitution and our Bill of Rights (the first 10 amendments) that
makes us free. Right? Then visit:
http://www.trimonline.org http://www.getusout.org
http://www.thenewamerican.com   http://www.givemeliberty.org
     http://www.jbs.org      Http://wwwgetawarrant.com
Then take a look at these sites:       http://www.dixierising.com
http://www.dixienet.org http://www.palmetto.org
http://www.southerncaucus.org   http://www.spofga.org
http://www.southern-style.com http://www.nca.mybravenet.com

NOTE # 1: This is the FIRST doc in a string of about 37 regarding the
Income Tax, How it was illegally forced upon us, the collusion of various
nation banks, including The Bank of England, the Banks of Europe, the Banks
of the USA that make up the Non-Government organization known as the Fed and
the bankers themselves dedicated to making this a Socialist Nation. As David
Rockefeller reportedly said in 1973 when he and others formed the Trilateral
Commission, "We will have this a Socialist Nation by the end of the year
2000." Well, with the help of our past Communist President, he damned well
nearly did it. If Comrade Gore had been elected, it would be now! The last
doc in this series is a plan that was presented to President Bush when he
visited Florida recently. It was put directly into his hands. He has not
acted upon it. We The People must initiate a campaign of letters, faxes,
e-mails, and phone calls to him and others in our otherwise corrupt
government letting them know of our displeasure. For God and Country, Chet.

NOTE # 2: [ Should you wish to be removed from my mailing list, please
send a message with the word remove in the subject line. If you got this
from a mail list, such as xxxxxx@xxxxxgroups.com or something like that,
then it is up to the moderator or owner of the list to remove my access
based upon complaints of my material, abuse, or removal of your access if
you request it. ]   Should you wish a copy of a numbered message
(this is the First one)   that you may have missed, please e-mail me off net
for a copy of it and I will be very happy to provide it. Chet.

You may forward this to every member of Congress by using a Mail Blaster
application available on the Internet as follows:
Step 1. Access your web browser.   Step 2. Type in the search block:
http://www.mailblasterdot.com
Step 3. Click on   Send Batch E-Mail which is on the left end of the screen.
Step 4. Type in your E-mail Address.   Step 5. Click on Subject: Type in
the subject of your document.
Step 6. Click on Message: Now here you can type in your message or you can
paste a previously copied file here. You can also edit your message after
you finish with the message and before sending it.
Step 7. Then click on   select a file. Here you may click on:
demhouse.txt (Socialist Democrat House Members) or,
democsen.txt (Socialist Democrats Senate Members) or,
newsorg.txt (Many of the "anchor" news folks have their email address here
for you to use) or,
rephouse.txt (Republican House of Representatives Members) or,
repubsen.txt (Republican Senate Members) or,
senators.txt (All Senators).
Step 8. After selecting the group to receive your message then click on
send batch. It will go to everyone listed in the batch.
Remember: Nothing beats a letter AND a phone call.
AS/Chester L McWhorter Sr, c/o 504 N. Brighton Rd, Lecanto, Occupied Florida.
34461. Ph: 352-344-9073. Fax: Same. E-mail: robertthebruce@naturecoast.net
01 of 37 100.0.0.0   End

Quote: We are on the verge of a global transformation. All we [ the CFR ]
need is the right major crisis and the nation[s] will accept the New World
Order. End Quote. David Rockefeller: Founder and Honorary Chairman,
Council of the Americas; Chairman, Americas Society; Founder, Forum of the
Americas; Chairman, Emeritus, Council on Foreign Relations [CFR]; Founder
and Honorary Chairman, Trilateral Commission [TC]; Chairman, The
Bilderbergs. [ How does the 11 Sept 2001 attack upon our country figure
into this? CLMsr ]

The Bankruptcy of the United States is a 38 part document.
See Contents on left column.

The Bankruptcy of The United States Part 1-39

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