The Legacy of Perpetual Debt
This article is quoted as it appears at the debtism.com website:
DEBTISM - The Legacy of Perpetual Debt is the American government's bequest to its hard working people. The practice of debtism has caused the USA to become the world's leading Debtor Nation. This did not happen because the nation is poor or in recession. The path from creditor nation to debtor nation is the direct result of faulty tax and welfare schemes that reward debt, penalize savings and erode the rights of a free people. The Social Security program provides prima facie evidence of how the U.S. economy has evolved from a system of private ownership and free enterprise to socialism and debtism.
The federal government has become the master, not the servant, of the people. Income that could be saved and invested for retirement and medical care (so the individual could provide for his own needs) is confiscated by self-serving politicians who believe they can administer personal welfare better than the individual. A review of government's and the Federal Reserve Bank's records of fiscal and monetary policies indicates a chimpanzee could probably do a better job and most certainly would be more entertaining. The coordinated efforts between these bodies and corporate America have promoted massive debt and government dependency while diminishing personal savings, equity, personal responsibility and the motivation for self-sufficiency to provide for one's own personal needs.
The arrogance of politicians, corporate and banking functionaries to think they can do a better job of managing money than an individual acting in his own self-interest is ludicrous and dangerous. The economic failures of the USSR provides an illuminating example of how dubious planning and excessive control by a central government erodes individual rights of the masses and diminishes the real value of labor and capital, over time. Vast wealth is concentrated into the hands of a tiny minority with increasing power over those who choose to surrender their individual freedom to socialist bureaucracies. History is a testament that centralized economic control, in the extreme, ALWAYS leads to ultimate disaster. (One might ask a Russian pensioner or retiree their thoughts on collectivism and paper money. Specifically, one might ask what happens to political promises when a fiat currency loses its luster, or debt service overwhelms income and creative new schemes to sustain economic bubbly? Then, one might ask, what is the United States doing to AVOID a similar outcome?)
The United States of America was created to provide a common defense for the republics. The U.S. Constitution was designed to limit the power of centralized government, and to preserve sovereign rights of and for the people. Insidious usurpations by Congress, the Executive and the Supreme Court of explicit rights guaranteed in the document have placed this country on a perilous path. Finding new meanings in the document that do not exist is a hallmark in the political and judicial "Halls of Blame". Signals of the ultimate demise of the "American Dream" abound. The Legacy of Perpetual Debt heads the list.
Warning of Perpetual Debt
"I place economy among the first and most important virtues and public debt as the greatest dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt. If we can prevent the government from wasting the labor of the people, under the pretense of caring for them they will be happy." --- Thomas Jefferson
UNITED STATES OF AMERICA - DEBTOR NATION
In 2004 the cap (debt limit) on official U.S. debt was raised to $8.2 trillion (12 zeroes). It is at the threshold of having to do it again, probably next month. There will likely be a great deal of political acrimony; but the limit will be raised to avoid DEFAULT on government debt.
The Government's power to transfer wealth from one to another (regardless of equity or need) has grown exponentially since the advent of Socialism during the last Great Depression. As costs of Socialism exceeded revenues, new victims, i.e. MOTHERS WITH TOTS, were compelled to join the work force and Debtism was created to fill the gap; thus paving the way toward latch-key kids and perpetual debt.
It took this nation 205 years (1776 to 1981) to accrue $1 TRILLION budgeted national debt. It has taken only 24 years (1982 - 2005) to exceed 8 TRILLION. On Dec 30, 2005, the debt was $8.17 TRILLION; but this is just the tip of the iceberg. Under-funded or un-funded government liabilities amount to a significant multiple of the official debt. Recent studies provide a flavor of the almost inestimable trillions in shortfalls. An example:
The Treasury Papers, a study that former Treasury Secretary Paul O'Neill commissioned record:
"A fiscal gap (the present value difference between government's projected expenditures and receipts) of over $44 trillion "now more than $50 trillion thanks to the new Medicare drug benefit. Almost all the un-funded debt is a consequence of Social Security Retirement and Medicare benefits. Medicare now faces an imbalance exceeding $36 trillion. That is the amount of money in present value that Medicare is projected to pay out for future benefits in excess of the money in its trust fund, plus the money it is projected to collect in future taxes and premiums. Social Security's imbalance exceeds $7 trillion."
These estimates do not include inadequate funding of the military and Civil Service retirement programs, Supplemental Social Security (SSI) nor the Medicaid program that is growing faster than Social Security. While adverse consequence of Debtism is already being felt by millions of Americans, the worse is yet to come. Under current tax and welfare schemes, those who save and contribute to Social Security, IRA's, 401k's, etc. will increasingly subsidize those who do not. Only significant changes in law or those who enact them can alter the trend toward a welfare state.
Debtism n 1. A corrupt economic system that increase debt and reduce saving by reward and punishment, incentive and disincentive. 2. A tax system that destroy thrift (saving) and encourage profligacy (debt). 3. A practice of perpetual government borrowing to sustain a consumerist driven economy until the currency collapses. 4. Demonetized, fiat currency (no gold or silver backing) that decreases in value over time. 5. Trust Funds overflowing with debt instead of certificates of ownership (i.e. stock, bonds, debt-free property)...demonstrated by pyramids of debt at all levels of society, erosion in capital formation and meager savings by the general public and long lines at bankruptcy courts. The insidious transfer of economic power from the people to their government and the loss of personal control over one's own destiny are the result.
You will not find the word debtism in a dictionary or a thesaurus. Once the masses understand the corrosive effects of this economic phenomenon, they will demand change. The consequence of debtism is compounding debt, a mirror image of the Magic of Compounding Interest (Compound interest pays interest not only on the principal, but on the interest as well.)
Absent immediate, corrective action, the dire economic and social outcome is not only predictable it is unavoidable. And, it will be catastrophic! The money spent by the central government is your money. Government debt (U.S. Treasury obligations' bonds and notes) that is sold to investors and placed in government Trust Funds is debt that can only be redeemed by further taxes on workers and investors, reduced welfare benefits, more debt, or more printing press fiat phony money that through inflation, continuously and insidiously loses purchasing power value.
The fundamental cause of this impending calamity is that the U.S. federal government has grossly exceeded the authority granted to it by the States and the People - expressed in the U.S. Constitution. The almost unrestrained growth in the POWER of the central government has irrefutably created unequal justice under law; that is demonstrated by economic inequality, social injustice and by perpetual, unsustainable debt. The most troubling and puzzling element of government's insatiable appetite for ABSOLUTE CONTROL, is that free citizens condone the intrusion. Perhaps the simple explanation is, Americans are not as free as they choose to believe. The one freedom being etched into granite is an individual right to recklessly make bad choices, since government stands ready to make sure someone else suffers the consequences and pay the damages. But, of course, shifting responsibility, blame and accountability is the price of admission to the Welfare State.
Other articles (focusing on Social Security) by SargeK may be found at:
debtism.com |
