Back at the start of the second decade of the 21st century, I was very concerned with the problem of U.S. debt and unfunded liabilities.
I wrote about the subject frequently. I studied charts put out by think tanks. I watched the presentations of Rep. David Schweikert, a newly elected U.S. congressman who was one of the few people sounding the alarm on the issue.
I even met with Schweikert, in early 2011, in his office in DC. I remember he threw me a bottle of water from his fridge (with a bit of a flourish, like Mean Joe Green throwing his jersey in that ‘70s Coke commercial), and then we sat and talked about the issue for a while.
Then he brought me down the secret elevator and through the tunnel to the Capitol, whereupon he passed me off to one of his aides, and she and I sat in the House gallery to watch a vote. (I think it was a re-issuance of the Patriot Act.) At one point, she and I got scolded by an usher for chewing gum!
Over the years, I have largely stopped writing about the issue—not because I have forgotten about it, but because it is pretty much baked into my cake at this point. It’s the same reason I stopped writing about leftward media bias—at some point, it became so obvious that it seemed pointless to keep rehashing it. At least for me.
I still do mention the issue of unfunded liabilities, debt, and hyperinflation occasionally—except now it is usually in the context of comments to my wife, such as
“Honey, we should really think about getting a chunk of land, some solar panels, and maybe a few chickens before the dollar collapses, our savings become worthless, or they start confiscating everyone’s retirement accounts.”
The clock on this issue is ticking, and each day brings us closer to the inevitable. This excellent post by
is a needed reminder that this problem is not going away. Rather than reinvent the wheel, I will simply direct your attention thereto, and note a few choice sections:The Spector of Mass Boomer retirements with few to no children and grandchildren to replace them and pay for all the costs of their retirements and healthcare was maybe the slowest but most assured crisis ever to be seen in human history… Demographics is destiny.
This was a foreseen problem in 2000 when US Debt to GDP (just the portion that’s already been spent and interest has to be paid on) was 59% of GDP. Today the US Debt to GDP ratio is 122% of GDP whilst just in the past 24 years Absolute US Federal Debt (not including state or local) has grown from 5.6 trillion dollars to 34 trillion dollars (102k per citizen: man, woman, and child). just the interest that has to be paid out of your tax dollars on that debt is set to eclipse ALL US Military spending sometime this year… And by 2028 Debt to GDP will be 150% (46.4 Trillion, 132k per citizen, 12 trillion more in 4 years, with no additional spending bills) and the Interest (at current estimates) will be over 2.5 trillion dollars, over a third of all Tax Dollars brought in will be spent on just interest, because dollar confidence has collapsed and the only way to keep inflation from destroying the dollar has been to radically raise the interest rates the Federal Reserve offers.
That is the debt issue. The unfunded liabilities issue is worse:
As of now total Unfunded liabilities stand at 213 trillion dollars, $633,000 per US Citizen (Man woman, and newborn babe)… These are all dollars the US has promised to pay to someone somewhere at some point: Social Security, Medicare, Medicaid, Federal pensions, VA Benefits, etc. And cannot in any politically feasible way restructure or get out of.
[…]
By 2030 approximately 1 million dollars per American man, woman, and child will be promised to someone somewhere in America, that cannot be paid, and with the system collapsing they will have to be told will not be paid. Every American Man, Woman, and Child will be 1 million dollars poorer than they think… And then very suddenly they will be aware of that fact.
Because, in broad strokes, I already know the above, I personally found what comes next—her predictions—to be the most interesting. If you have a high normalcy bias, you will probably find those predictions overwrought.
If you have a low normalcy bias (as I do), or if you know anything about history or economics…you won’t:
Around 2030 all Americans are going to have to turn on each other and carve that missing million out of their fellow citizen… This might be millennials becoming even greater debt slaves, this might be boomers kicked out of nursing homes to beg in the streets, this might be ethnic conflict to either make the white middle-class pay 2x the income tax forever, or a violent assault on the black inner-city to destroy the millstone of welfare America once and for all and free up millions in real estate in now unsafe cities… This might take the form of a communist revolution, the confiscation of all real estate, and the forcing of Americans into work camps, this might take the form of the mass slaughter of Federal employees and IRS agents so that no federal insurance schemes can ever be paid out and no pensions because the government employees are dead… This might take the form of mass Euthanasia of cancer patients, drug addicts, and the non-working… Everyone who shows up at hospital and isn’t expected to be net profitable, axe em.
But one way or another when it gets so high that the economy has a downturn or crash: 1 or even 2 million dollars (depending on the spending bills they pass on the way down) per man, woman, and child will have to be carved out of some American somewhere… Even if you say “Just End Social Security, Medicaid, Medicare, and the VA” that’s millions individual Americans, and veterans, are owed and depending on.
I know all that sounds crazy, but seriously—there is no economic way out of this situation.
They are not going to stop spending. As Hans-Hermann Hoppe describes, in devastating detail in Democracy: The God That Failed, the incentives of government officials are always short-term. They are not trying to protect the capital stock of the nation, the way an owner would. They are not trying to preserve a kingdom to pass on to their heirs, the way a monarch would.
Their goal is ever and always to get what they can out of the system in the short run. From there, their formula comes straight from John Maynard Keynes: In the long run, we’re all dead.
They are not going to stop promising pensions for the same reason that they won’t stop spending. They will not stop treating Social Security and Medicare as the third rail. They will not stop pretending that they are solvent and secure.
They are going to ride this train at breakneck pace until right before it goes over the cliff. Then, at the last minute, they will panic…
Maybe they’ll hyperinflate the currency.
Maybe they’ll default on everything and just let the chips fall where they may.
Maybe one of the many horrors predicted by
will come to pass.
Whatever these clowns will try, it will be far too late. When that comes, your best bet will be hard assets. Land. Food. Family. Friends. God.
Plan accordingly.
The only prediction I take heart in is that most predications won't materialize. What we don't know - which is a lot - is always missing from them.
Not to say we aren't looking at looming problems and potential global financial collapse. Or that we shouldn't take whatever steps we can to soften it. I'm all for that.
What I am saying is that communities can find ways to support each other and use their own form of money to do it. In the midst of collapse there are already new systems coming into play and that will only continue.
We existed prior to all systems and while we've forgotten a lot, when the context changes radically (the world that is) a new context will generate all kinds of solutions we don't yet see.
Not saying the transition will be easy, not saying we won't witness panic and brutality either. We've already seen it - but the shift is towards more of us seeing the chains that have kept us tethered to a manufactured reality that served a small group. We don't yet know what that kind of change will bring. Surely some of it - inspired by the spirit of freedom itself - will be very positive.
Thank you. Best.
Watch for a failed treasury auction. Bond and T-bill Buyers will begin demanding ever-higher interest rates, and soon thereafter, they'll just stop buying. They'll be more worried about the return *of* their money than the return *on* their money.
At that point, the Federal Reserve Bank will start buying ever-more T-bills and bonds with money created out of thin air -- they just create a journal entry for the Treasury. That will be the beginning of a vicious inflation spiral. Ask Venezuela and Argentina, and read about the old Weimar Republic.
Watch Javier Milei (may God protect him), who is trying to fix Argentina's runaway inflation program. He quotes all the authors I've always admired, like Friedman, Hayek, von Mises, and others. I read every article on Milei's moves. As he ends his speeches: "Liberty, damn it!" He freely warns how painful the changes will be.
I too have met with David Schweikert, who really understands finance -- I believe I still have videos that I made of his educational talks on debt from ~2011-2013. They were excellent. I'd love to make a video of him in front of a magnetic white board with a list of the 630 federal agencies and departments. Like Javier Milei, has done, he could read the agency name, tear the tag off the board & throw it away shouting "AFUERA!" with each tag he tears off.
Chris is right -- if we can't get some adult supervision in charge of our runaway federal government, our debt will crush us all.