Our $100
Trillion National Debt
By Biby Bill Walkerll W
08/08/08 "Lew
Rockwell"
-- - The "official" debt of the United States is only around
$10 trillion dollars as of August 6, 2008. This is a manageable
number; we could pay it off in a few decades if we quit buying
luxuries like food and clothing, and take a few other minor
economy measures. Unfortunately, the "$10 trillion" number was
produced by government accounting, which among other things
allows one to ignore Social Security, Medicare, and the new
prescription drug benefit. This is like ignoring rent, food, and
utilities in your household budget… it will lead to a few
bounced checks. Our real debt is about ten times higher.
Who says
so? The President of the Dallas Federal Reserve, Richard W.
Fisher. In a May speech at the Commonwealth Club of California,
he states that the US national debt is close to $100 trillion.
You can
read his whole speech at the Federal Reserve web site.
The
Real Debt
Here is
what he said regarding the actual US debt:
"Add
together the unfunded liabilities from Medicare and Social
Security, and it comes to $99.2 trillion over the infinite
horizon. Traditional Medicare composes about 69 percent, the new
drug benefit roughly 17 percent and Social Security the
remaining 14 percent."
Interested readers will notice that the new prescription drug
benefit is projected to be more fiscally crushing than all of
Social Security.
Mr.
Fisher points out that this $99.2 trillion will be a bit of a
burden to pay off:
"Let’s
say you and I and Bruce Ericson and every U.S. citizen who is
alive today decided to fully address this unfunded liability
through lump-sum payments from our own pocketbooks, so that all
of us and all future generations could be secure in the
knowledge that we and they would receive promised benefits in
perpetuity. How much would we have to pay if we split the tab?
Again, the math is painful. With a total population of 304
million, from infants to the elderly, the per-person payment to
the federal treasury would come to $330,000. This comes to $1.3
million per family of four—over 25 times the average household’s
income."
You do
have $1.3 million in your pocket, right? What, are you some kind
of deadbeat?
Speaking
of deadbeats, the "$99.2 trillion" estimate does not include the
subprime bailout. So for those who like large round numbers, by
the end of 2008 the real National Debt should be large, round,
and about $100 trillion.
Other
Unfunded Liabilities
The Fed’s
numbers do not include some other liabilities the US has
acquired over the years. One massive but unquantifiable
liability is the probability of future wars. If it cost the US
hundreds of billions of dollars to invade the fifth-rate
kleptocracy of Iraq and the foreign-aid regime of Afghanistan,
how many trillions would wars against real powers cost? Perhaps
I should ask "how many US cities" such wars would cost.
Some
nations could legitimately plan for peace. Sweden has not fought
a foreign war since 1814 (as many Swedes have pointed out in
emails regarding my Swiss article). Switzerland, not since 1815.
The US record is less hopeful.
The US is
rarely not in foreign wars, and the current
Administration has openly announced that the "Global War On
Terror" will never end. Yet our government accounting is
predicated on perpetual peace, on an ever-increasing flow of
money into the official pyramid schemes.
In any
case, whether you are pro- or anti- Empire, real accounting
demands some reserves for future war contingencies. When even a
few US cities are burning radioactive pyres, the flow of funds
to Social Security and Medicare will suffer some interruption.
Any
fiscal plan demands amortization of the accumulated hatred our
foreign adventures have accumulated. The US taxpayer has aided
every evil dictator since 1945. Stalin, Castro, Pol Pot, Nyerere,
Idi Amin, go right down the roster and US money helped pay for
the barbed wire and bullets (and the nuclear reactors, in the
case of the Kim Dynasty rulers of Korea).
So far
blowback has been quite mild. But in a world full of easy
do-it-yourself WMD technologies, our luck can’t hold forever. If
the US were a private company, the "badwill" on our books would
reach into the tens of trillions.
Tearing Up The Credit Cards
Most
likely, the US will simply continue into bankruptcy. This is the
most common pathway for nations with fiat currencies and
unchecked ruling classes. But let’s assume that somehow a Clone
Army of 435 Ron Pauls gets into Congress, while genetic
technology brings back Jefferson and Gallatin to their old
offices. Can the US be made solvent again?
I think
so. Most of the unfunded liability is medical.
We
know why the medical system does not work. So if we
eliminate the FDA, guild restrictions on medical professions,
and the ridiculous tax laws that force us into medical-insurance
serfdom to employers, we could cut medical costs enough to phase
out Medicare and the new "drug benefit." In this way more than
half the shadow debt can be wiped out.
The
answer for the Social-Security pyramid scheme is well known.
Chile fixed its Social Security disaster decades ago, by giving
large IRA-style allowances and phasing out the government
payments to younger recipients. The sooner we do this the easier
it will be… the Boomers start retiring soon.
Most
important, we have to listen to the Founder’s calls for free
trade with all nations but entangling alliances with none. The
US cannot stop every quarrel in the world even if we wished… and
the actual record of our foreign-policy geniuses has been to
send a couple of trillion dollars out to the very worst
criminals in human history. Aid To Dependent Dictators must
stop.
None of
this will happen while Mordor-On-The-Potomac still possesses its
plutonium credit card, the Fed. Just as we would for any other
bankrupt relative, we must help Uncle Sam cut up his credit
cards.
Bill
Walker [send him mail]
is a research technologist. He lives with his wife and four dogs
in Grafton NH, where they are active in the Free State Project.
Copyright ©
2008 LewRockwell.com
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