Question is..... is the government secretly planning to print up more money and put in circulation to try to handle these enormous liabilities? If they do that, then we will see tremendous rates of inflation. Unfortunately, that could be the path of least resistance.
Government can get the money through taxation, borrowing, putting more money in circulation, or some combination of these.
Or, we could see cutbacks in future benefits under these government programs. But it’s not likely than any politicians, Republican or Democrat will push for any such policies.
Nor will the politicians try to wean people off of food stamps or Section 8 or..cell phones. Something’s got to give. Question is how all this gets solved in the decades ahead.
Remember, money isn’t value, money represents value. Printing more money doesn’t solve the problem, it just divides the total value of the economy into smaller pieces on the premise that the number of pieces is what was agreed on, not the value per piece.
Unfounded liabilities at 550% of GDP means we need to use five years’ worth of economic activities to pay one year’s obligations. They could confiscate 100% of all income, and not even meet 20% of obligations. Redefine the dollar however you like, drive inflation thru the ceiling, the feds are obligated to confiscate over 5x what everyone earns in a year for any obligations indexed to inflation. Should those obligations not be indexed to inflation, the inflation needed to make the numbers work (i.e.: effective cheating) would wreck the economy.
Hyperinflation is their only way out of this.
And “out” means jumping over the cliff.
The two extremes are chaos (the Zombie Apocalypse) or totalitarian tyranny (we must have order...the trains). The Bernanke seems to believe he can inflate carefully, continue the gravy train AND Ponzi schemes, AND should the economy begin the shrug back to live even under these burdens he can suck the “funny money” back and avoid hyperinflation all the while with no one the wiser. This is like praying for a series of unlikely miracles. In fact, that is exactly what it is. One problem I see is that he has no problem pushing funny money forward but who is he going to get it back from? The US Taxpyer is tapped out.