This is an update of my webpage on America's
bankruptcy.
Here are four resources I think every politician and every would-be
leader in America should read. Or at least be aware of.
1. Is
the United States Bankrupt? (PDF
146k)
by Laurence J. Kotlikoff
The Federal Reserve Bank of St.
Louis Review
A journal of
national and international economic
developments, particularly focusing on their
monetary aspects.
JULY/AUGUST 2006 Vol. 88, No. 4
Proceedings of the Thirtieth Annual
Economic Policy Conference of the Federal
Reserve Bank of St. Louis, pp. 235-250 |
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The author says "no," but the answer is "yes,"
which is what motivated him to write the article. The government has
made legally binding promises to pay trillions of dollars it doesn't
have and has no expectations of getting. There is no way the government
can pay its financial obligations -- not without completely overthrowing
our system and nationalizing homes and businesses. The unfunded
liabilities of Social Security and Medicare have Prof. Kotlikoff very
worried. He uses the word "terrifying."
If he's worried, so am I. I'm doubly worried that the government doesn't
seem to be worried.
| 2. Here
is an article written by Clarence Manion, the
former Dean of the Law School at Notre Dame,
written back in November of 1955. |
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This article proves that the government has always known that the Social
Security system is a fraud. From the beginning. It's just another tax.
Nobody's money is safe. It's gone. The money promised by the government
for people's retirement doesn't exist, and there's no hope of being able
to raise taxes enough to pay what's been promised.
This is an update on Kotlikoff's paper, above. I first blogged about
Kotlikoff in August
of 2007. The government was over its head to the tune of $60
trillion. Then in October
of 2007 I ran across the "From
Here to Eternity" speech, which updated government red ink to $83.9
trillion. "Storms
on the Horizon" pegs it higher, and I'll bet today, four months
after that speech, we've topped $100
trillion. Fisher wrote:
How much would every U.S. citizen who
is alive today have to pay if we 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? 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.
Politicians have promised this amount of benefits to every man,
woman, and child in America in order to buy their votes.
This is insane.
Rockwell is founder of the Mises Institute, named after Ludwig von
Mises, arguably the greatest free-market economist of the 20th century,
whose student Friedrich Hayek won the Nobel Prize for Economics in 1974.
Rockwell points to the great economists who have proven that the
government caused the Great Depression. Fed Chairman Ben Bernanke
admitted this at Milton Friedman's 90th birthday, although he may
arrogantly believe that he can prevent another Depression even though
the fed is doing exactly what brought on the first Great Depression.
Bernanke may believe that the problems caused by the expansion of the
nation's credit before the 1929 meltdown were caused by the failure of
the government to further expand by creating oceans of
paper.
This is the thinking behind the proposed bailout of Fannie Mae and
Freddie Mac.
This kind of mismanagement -- indeed, our entire monetary system --
is unconstitutional and unethical. The Constitution was sold to America
by James Madison on the basis of the average American's "love of
justice and his knowledge of the true springs of public prosperity [and]
the pestilent effects of paper money on the necessary confidence
between man and man, on the necessary confidence in the public councils,
on the industry and morals of the people" (Federalist #44).
The Constitution withdrew this dreadful power to issue paper money.
Inflation is immoral.
Politicians who vote to further inflate the money and credit system by
bailing out Fannie Mae and Freddie Mac sin against God. There's
just no way to mince words on this. They will bring upon this nation the
Greatest Depression.