The REAL State of the Union
By Bill Pressgrove
November 28, 2009
The news coverage today what appears to be that of the pressing issues; health care, the wars, cap and trade, security breaches at the White House, etc. The government has been very good at misdirection and has successfully derailed news media from the central issue. It’s time to get to the bottom line.
The bottom line is this. WE owe $106 trillion dollars in liabilities or $345.131 dollars per person in this country. Now what are liabilities? Their things we have promised to pay, but were never funded. That includes $14 trillion in Social Security, $18 trillion in Prescription Drug commitments, and $73 trillion in Medicare commitments. These are all things we have promised to ourselves. The National debt (money we already owe) is over $12 trillion and climbing. All of these things add up and then you add the fact that the government printing office is in operation 24/7 printing more fiat money (fiat means there’s nothing to back it up) with no end in sight, we are digging ourselves into a deeper hole. (http://www.usdebtclock.org/)
There is something we can do to end this downward spiral into becoming the poorest of the third world countries, but it will be painful and it will seem unjust to those who are legitimately entitled to it. To others who have become accustomed to living off the government without ever having lifted a finger to earn any of what they receive, this will seem like a declaration of war on their way of life. Yet think about it.
Everything that government is trying to do is focused on maintaining and expanding the “entitlements” that have been promised over the past 75 years. Each entitlement out pacing the previous to ensure those who propose and support them will be re-elected the next election. WE have been lulled to sleep by these promises of a utopian way of life in which all of us receive whatever we need without ever having to take thought of where it is coming from. There is a substantial number of our citizens that look to the government for their sustenance, housing, and medical care without ever giving a thought as to where the government gets its money from. Very few people think about the fact that the government cannot give anything to anyone that it has not first taken away from someone else. Think about that—government cannot give anything to anyone that it has not taken away from someone first.
Looking at the National Debt, and the unfunded liabilities this country has, it seems that government has not only spent all the money it has taken from those who pay taxes today, but has promised this generation monies they plan on taking from our children, grandchildren and great grandchildren for three and four generations yet to come. That seems to be robbery to me. Those yet unborn have no voice in this debt they are being saddled with. There are two things that we can do that would bring this debt back into perspective.
First, we can stop promising people more money, programs, and the easy life. They will have to suffer as our ancestors did or any of us should when we don’t make any attempt to provide for ourselves. That means there would be no more money handed out by the government to those who are receiving now without working for it.
Second, we can cut off the programs that are unfunded. Yes that would mean that we would all have to bite the bullet and start being self-sufficient again, instead of relying on the unfunded programs that are now paying our way. This would cause a reversal in the trend toward total dependency on the government. This process began with a simple “retirement” fund about 80 years ago but has, for some, grown into total dependence.
Well there you have it. The bottom line is we can abolish $106 trillion in unfunded liabilities we’ve promised to ourselves. Then with a balances budget with a substantial payment toward the National Debt, not just making the interest payments, but tightening our belt so that government could then put about $500 billion chunk against the principle as well. We could be out of debt within a generation.
The other thing that needs to be done that would directly affect the payment of the National Debt would be to scrap the current graduated income tax (which is taking from the rich a disproportionate amount of income in the tax) and replacing it with a National Sales Tax that would tax consumption and not income. (There are some intricacies in this proposal that will have to wait for another time, but to get a good idea of such a tax go to http://www.fairtax.org.) This would free up revenue for investment in new companies or expansion of existing ones so that the economy can grow again. (More companies, more employment. More employment, more tax payers. More tax payers, more revenue. More revenue the debt goes away.)
This will require all of us to sacrifice and to shift our paradigm from one of having government security to one of personal responsibility. We need to either become our own personal finance planners or hire someone to do it for us. It’s not the government’s job to provide us with all our needs in our old age. Looking at it, the government isn’t planning on doing too good of a job taking care of our “health” in old age anyway so why trust it to them?