In
coming years, effective tax rates may reach 50, 60, even 70 percent. This will
be no socialist paradise. It will be a national nightmare, because
even with confiscatory tax rates, politicians will still have no choice but to
chop Medicare and Medicaid—leaving tens of millions of people without adequate
health care. Retirement ages will be raised well beyond 70. And if you are in
the military, start looking for another career, because everything from our
aircraft carrier fleet to the man on the beat is going to be mothballed.
Sound unbelievable?
Here it is: One in
seven households is on food stamps. Another one in seven Americans receives or
lives with someone who gets Medicare. More than one in seven households relies
on Social Security. More than one in four has at least one
person on Medicaid. One in 50 households has a member relying on unemployment
benefits. Thousands more have members on disability.
Add it all up and
49.1 percent—almost half—of America lives in a household where at least one member receives some type of government benefit!
Did you get that?
Roughly half of America is on the government dole. Many households receive more
than one government handout.
Greek historian
Alexander Tyler wrote: “A democracy cannot exist as a permanent form of
government. It can only exist until the voters discover that they can vote
themselves money from the public treasury. From that moment on, the
majority always votes for the candidates promising the most money from the
public treasury, with the result that a democracy always collapses over
loose fiscal policy ….”
The democratic
process becomes one big race to vote for the politicians promising the biggest
handouts. Consequently, government finances continue to erode under the
pressure of fulfilling the hundreds of campaign promises necessary only to buy
votes. A similar process occurs when spending bills are sent to the House and
Senate. To secure the votes needed to pass legislation, each congressman and
senator gets his own special spending project included in the bill, to curry
his vote.
According to
official government statistics, America’s total unfunded liabilities (primarily
the amount we have promised voters in Social Security, Medicaid and Medicare)
is now over $61 trillion. But the actuaries at the cato Institute, using
real-world accounting practices that the government demands businesses use, say
the shortfall is actually closer to $119.5 trillion!
Meanwhile,
America’s total gdp (the value
of all the goods and services produced in the entire country for the year) is
only a little over $15 trillion.
USA Today reports that
if the government were to actually try to balance its budget, the typical
American household would have had to pay nearly allof its income in
taxes! That is just to balance the budget, never mind paying down the debt.
Even if starting
tomorrow America said it would spend no additional money beyond current outlays
for Social Security, Medicare, Medicaid and so on—the nation is still on an
inescapable trajectory toward bankruptcy.
America’s national
debt, not including retirement liabilities, has already passed our gdp. Once
a nation’s debt reaches 90
percent of gdp, the
risk of total economic collapse skyrockets. That’s what happened in Greece. It
is happening in Spain now.
And if nothing is
done, it will happen in America soon too.
America’s debt
to gdp ratio
is now around 103 percent! The
big expenses like ObamaCare haven’t even begun to hit yet—and already the
government is forced to borrow one out of every three dollars it spends. And of
those borrowed dollars, last year about 40 percent were printed up out of thin
air by the Federal Reserve because America couldn’t find any borrowers to lend
it money at current rates.
America faces a
mathematically certain nightmare. Just like in Greece, our economy is growing
too slowly and tax revenues do not get close to covering all our spending
“needs.” Programs will be cut. Austerity will come to America. The government
will print money. But as sure as 1 plus 1 equals 2, economic collapse is coming
to America. The only question is how soon.
Robert Morley
http://www.thetrumpet.com/9481.8351.0.0/economy/americas-mathematically-certain-nightmare
http://www.thetrumpet.com/9481.8351.0.0/economy/americas-mathematically-certain-nightmare
