Previous analyses of “by the numbers” can be accessed by entering the phrase in the search box above. This is the third and final post in this series where we look at the numbers to truly find out how good, not likely, or bad, most likely, the American political class is doing in managing our tax dollars, protecting our freedoms, and resolving major issues that affect all of us.
A short post today that involves the only issue that I believe matters when it comes to the Presidential election. Forget about abortion rights, gun rights, taxes, jobs, etc. The only overriding issue that matters is the incremental amount of debt that government entities across the country have incurred and continue to incur every minute of every day.
How bad is the debt problem that governments have today? Let’s do the numbers:
- The ‘regular” national debt of the Federal government is just over $27 trillion and counting.
- The first covid economic stimulus plan cost the Federal government $3 trillion.
- The next follow up stimulus plan is likely to cost about $2 trillion.
- Thus, in short order the Federal government will be servicing a debt of about $32 trillion, a number that will continue to grow.
- Recent government analysis estimates that over the next few decades there will be about $82 trillion in unfunded liabilities in Social Security and Medicare, where unfunded liabilities is the difference between the money the government expects to have to fund these programs and the larger amount of money that will be actually needed to fund these programs in their current state.
- But state governments also have unfunded liabilities with a recent analysis putting those unfunded liabilities at around $7 trillion.
- But this is before the unforeseen state government covid expenses so lets estimate that there are an additional $4 trillion in state government unfunded liabilities.
- Add up all of these debt loads and unfunded liabilities and we see that state governments and the Federal government have about $125,000,000,000,000 ($125 trillion) in some form of debt, a level that grows by the minute.
- How big is $125,000,000,000,000, let’s do some numbers.
- There are about 331 million people living in America today so if that $125 trillion debt load was spread out over every American, each American, including kids, would have to write a check for about $377,000 to cover the government debt load.
- Thus, a family of four would need to write a check for about $1.5 million to cover the $125 trillion government debt.
- There are about 129 million households in the country so if each household was to pay for the debt, every household would need to write a check for $972,000.
- But what about the liberal mantra of “tax the rich” to pay for the debt?
- Let’s start with Jeff Bezos, the richest man in the country.
- Although his wealth level varies according to what happens to Amazon's stock price every day, most estimates put his personal wealth at around $175 billion.
- Rather than increase his tax rate or put a tax on his wealth, let’s assume the government could seize his ENTIRE personal wealth ($175 billion) and sell it off to help pay for the debt.
- But his $175 billion, even if it could be liquidated and used to pay down the debt, would account for only .14% of the $125 trillion, no 14%, not 1.4%, a measly .14%.
- Elizabeth Warren once proposed a wealth tax on the rich of 2% of their total wealth and belongings, which means that if her stupid tax was applied to Bezo, that .14% would be 50 times smaller.
- Not convinced that taxing the rich would not pay for the $125 trillion, consider the latest estimate from Forbes which says the richest 400 people in this country are worth about $3.2 trillion.
- If we confiscated their entire net worth and somehow liquidated it we would be able to pay off only 2.6% of the $125 trillion.
- If we used Warren’s 2% number then the richest 400 people would only be able to pay off .5% of the $125 trillion.
And no one, absolutely no one, neither the Democratic Party or the Republican Party, cares about this dire situation. And like I proposed above, nothing else matters because when this debt bubble blows, assuming no one in a position of power ever gets around to attacking the problem, the consequences will be huge:
- There are analyses around that say in about five years or so, Medicare Part A will go belly up, meaning less affordable and less available medical care for Medicare recipients.
- Shortly after that, the Ponzi scheme known as Social Security will begin to implode which will likely result in a drastic reduction in Social Security benefits.
- Given that Social Security is now in a cash negative position which is growing steadily larger every day, this implosion is not that far off.
- In a desperate attempt to fill the debt hole in government budgets, state governments and the Federal government will raise taxes.
- But the raising or taxes will reduce consumer spending and business investment which will crash economic growth and result in lower, not higher, tax revenues.
- At the same time, desperate governments will start cutting spending, way too late, which will result in immediate draconian cuts in police and fire forces, reduced number of teachers, crumbling infrastructure, etc.
- In another desperate move, the Federal Reserve will start printing money which will likely lead to hyperinflation.
- And before you know it we look like Venezuela: high taxes, higher and higher prices, shortages of all sorts, reduced government benefits and services, and quite possibly the collapse of our democracy and freedoms.
Illinois and California are looking to raise taxes even higher than their existing high rates to cover their out of control spending and debt even though there is a steady migration of state residents in both states moving out. Thus, these two states are already in a financial death spiral: they keep raising tax rates which drives taxpayers to other, more affordable states which reduces state government tax revenue which forces them to raise the tax rates more, etc. and the death spiral is in effect.
So, yes, please go vote, it is your responsibility to make your voice heard. But before voting for a Republican or Democrat, ask yourself if you really think that they will be able to resolve the debt bubble before it is too late. Given their history of only incurring more and more debt, I doubt that either party and all of their candidates they are putting forth have the wisdom, the courage, and political will to fix what is going to severely and negatively affect every American, a crisis that will make all other problems insignificant in comparison and a crisis that is going to likely happen pretty quickly.
If you do take that moment to pause and consider what the existing two party system will not do, may I suggest that you look into the Libertarian Party for an answer to the debt issue. The Libertarian Party is the ONLY national party that recognizes the tragedy that this debt issue will bring and actually has the plan and will to address it before it is too late:
Have a great day!
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
Please visit the following sites for freedom:
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w
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