While the CONgress plays its insane political games, we, in the end, will be stuck with the mess they are making. The only hope that currently exists that would allow us to recover this economy was the hope everyone would allow the time necessary to “unravel” the mess. If the “fools” on-the-hill act irrationally and erode the confidence that everyone is tenaciously clinging to at this time, then all bets are off and the panic is on. That panic will send the tittering world economy crashing. The house of cards will fall like a controlled demolition. That is in no way an exaggeration. Closure of the government, even for a day, signals a default on the part of the US Government. Failure to raise the debt ceiling creates immediately “the day of reckoning”.
The U.S. national debt continues to surge higher every day and is now at $16.95 trillion and will soon surpass the $17 trillion mark. When Standard & Poor’s reduced the U.S.’s credit rating from AAA to AA-plus, it was the first time the U.S. ever suffered a downgrade to its credit rating. The S&P took this action despite the plan Congress passed at the time to raise the debt limit. The downgrade, S&P said, “reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.”
However, the real national debt is higher, much much higher than $17 trillion! It’s those medium- and long-term debt problems that worry economics professors and investors like Laurence J. Kotlikoff, who served as a senior economist on President Reagan’s Council of Economic Advisers. He says the national debt, which the U.S. Treasury has accounted at about $17 trillion, is just the tip of the iceberg.
“We have all these unofficial debts that are massive compared to the official debt,” Kotlikoff tells David Greene, guest host of weekends on All Things Considered. “We’re focused just on the official debt, so we’re trying to balance the wrong books.” “If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That’s the fiscal gap,” he says. “That’s our true indebtedness.”
To put this in terms that we the taxpayers and official debt holders can understand that means each of US is on the hook for about $1.5 MILLION! No, that is not a mistake in the math. So to put it other way, let’s assume each individual taxpayer consistently earns $40,000 per year, this number represents 100% of your income for about 38 years! Essentially ALL of your income for ALL of your working life. This is how insane reality is right at the moment.
This reality cannot exist without each of us being indentured slaves, so we must pay attention to what is going on and we must intervene to stop this madness. So many times we are asked, “well what can I do anyway?” We always respond by saying if you do nothing what will happen?
First and foremost, this reality is not tenable in any manner. If we face reality, then the US and each one of us is bankrupt, period. We have to discharge this debt, period. Secondly, those politicians and the Fed, and the banksters who really created this reality are guilty of gross malfeasance and should be immediately removed from their respective positions. Those individuals who are proven to be criminally involved should be brought to justice and processed by due process of law for their crimes.
Then and only then can we right the ship and get the world’s economy back on at least some sort of track of reasonableness.
Thomas Jefferson was absolutely right when he said: “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies… The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”