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$205 Trillion in Unfunded Liabilities
Daily Reckoning ^ | 02/12/2014 | Gary North

Posted on 02/13/2014 8:13:12 AM PST by Rusty0604

The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.

There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information should not get out to the American people, namely, that the present value of the United States government’s off-budget liabilities is over $200 trillion.

The CBO has two sets of books. This is what any Ponzi scheme requires. It releases one set of books to the rubes in the financial media, who are perfectly content to quote from it, when they are even aware of it.

In past years, the CBO simultaneously released what it calls its Alternative Fiscal Scenario. This forecast is what CBO actually projects future taxes and spending to be ...But this year, the CBO’s long-term forecast included only the EBF. The AFS was nowhere to be seen.

The CBO did not get away with this, at least not to the extent that it had hoped. There were complaints...The CBO posted this information, but it did not alert the financial media to the update. Using the AFS figures, the unfunded liability is $205 trillion. This is the figure that the CBO does not want the general public, meaning the financial media, to be aware of.

There is no way out, other than default. This will have profound consequences politically, economically, and socially. It will be the end of the Keynesian welfare state. The Keynesians will be left holding the empty bag.

This is how all Ponzi schemes end. But those deluded souls who buy into them refuse to face statistical reality until the scheme blows up, leaving them empty-handed.

(Excerpt) Read more at dailyreckoning.com ...


TOPICS: Business/Economy
KEYWORDS: cbo; debt; unfundedliabilities; usdebt

1 posted on 02/13/2014 8:13:12 AM PST by Rusty0604
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To: Rusty0604

THis is Obama’s primary tool in his quest to destroy America.


2 posted on 02/13/2014 8:14:40 AM PST by G Larry
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To: Rusty0604

It seemed like only a short time ago it was 100 trillion. When it goes parabolic like this the end is near.


3 posted on 02/13/2014 8:16:26 AM PST by MichaelCorleone (Jesus Christ is not a religion. He's the Truth.)
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To: Rusty0604; Lurkina.n.Learnin; nascarnation; TsonicTsunami08; SgtHooper; Ghost of SVR4; ...

Theres' Something Fishy In The House Of Morgan, Pt. 2: Bitcoin Fear, Envy & Loathing


Click to be Added / Removed.

4 posted on 02/13/2014 8:21:54 AM PST by Errant (Surround yourself with intelligent and industrious people who help and support each other.)
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To: Rusty0604

Do we have graphs showing the payouts as needed over time? vs revenue? vs “borrowing”? vs GDP? Would help nail down when hyperinflation (ie: the end) arrives, the point when it is impossible to print enough cash to in effect confiscate enough wealth to pay up.


5 posted on 02/13/2014 8:26:05 AM PST by ctdonath2 (Making good people helpless doesn't make bad people harmless.)
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To: Rusty0604

“You can’t con an honest man, but you can con a dishonest man all day.”

“”Elect me, and I’ll steal for you!”


6 posted on 02/13/2014 8:26:35 AM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: G Larry
One man didn't do this. Barkey is just playing his part.

And words mean stuff. This topic doesn't get much attention because "Alternative Fiscal Scenario (AFS)" should more appropriately be named, "Actual Fiscal Scenario".

I bet that would turn some heads. Something as simple as conservatives putting forth a bill to rename it, and mandate the reporting by CBO would be huge and serious (or hugh and series, if you prefer).

7 posted on 02/13/2014 8:28:09 AM PST by Salvavida (The restoration of the U.S.A. starts with filling the pews at every Bible-believing church.)
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To: Rusty0604

HOORAY Gary North! Socialism Is Legal Plunder. ID the socialists. Some here…

http://cpc.grijalva.house.gov/caucus-members/

Many others are not so obvious. ID some by their words and some by their deeds.

DEPOPULATE socialists from the body politic. For the damage they have done to the republic, their assets should be subject to confiscation.

It’s easy to…

live - free - republic


8 posted on 02/13/2014 8:30:09 AM PST by PGalt
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To: G Larry

The welfare state started long before Obama. He just added another entitlement as did Bush 43 with the prescription drug program, which represents a $7.3 trillion unfunded liability.


9 posted on 02/13/2014 8:32:04 AM PST by kabar
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To: Rusty0604

I’m with you, have been on this one a long time. Thanks for updating me and informing others.


10 posted on 02/13/2014 8:37:04 AM PST by veracious
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To: Rusty0604

There is no way out, other than default. This will have profound consequences politically, economically, and socially. It will be the end of the Keynesian welfare state. The Keynesians will be left holding the empty bag.

************
The French have a good word for this: denouement. Its the final part of a story when the plot or outcome becomes clear and is resolved. In other words, the Big Reset is coming.


11 posted on 02/13/2014 8:37:08 AM PST by Starboard
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To: MichaelCorleone

Totally agree with you. The debt is not just unsustainable, its cataclysmic in the true sense of the word.


12 posted on 02/13/2014 8:39:57 AM PST by Starboard
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To: Rusty0604

All of these doom laden forecast ignore the government’s prime weapon - deflation. They can reduce their debt by an unlimited amount by inflating the currency. How much inflation would you like today? Say “Pengo” - (No, not the game).” Say “Mark”. The possibilities are limitless.


13 posted on 02/13/2014 8:45:54 AM PST by I am Richard Brandon (center)
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To: Rusty0604

A deluge of consequences to ensue if the voters don’t get it right in the next two elections.


14 posted on 02/13/2014 8:47:00 AM PST by Vaduz
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To: Rusty0604
This is just a (jestful) thought. Maybe we could get all those african email scammers to somehow agree to take on our American debt.

Somebody could design an email...

Hey, the Chinese have been taking our debt on for years.

15 posted on 02/13/2014 8:47:03 AM PST by Slyfox (We want our pre-existing HEALTH INSURANCE back!)
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To: Rusty0604

They’re funded, by the future stream of tax revenue.

And they’re not real liabilities in practice. Real liabilities can’t be changed. If I owe someone $1,000, I can’t unilaterally say to that person, “I say I now only owe you $600”.

The international-banker-controlled Federal and State governments, on the other hand, can, in the future, pass legislation (or in the pResident’s case, simply sign a banker-written executive order) that says, effectively, “we were going to pay you $1,000, but we’re only going to pay you $600.”

But the scam-elected politicians, being minions to bankers, have been ordered to never ever reduce the obligations of government. Never.

The bankers order them to adhere to this rule, of constantly ratcheting up government spending and never decreasing it.

Why ?

Because spending more than is received in taxes causes governments to go hat in hand to bankers to borrow. It’s been going on for centuries. The top-level advisors to governments have been part of the banking world. The head of state views “his” bankers as his key ally, while all along the banker views him as a rube ripe for being controlled by them. He is only their expendable, replaceable puppet, in their view, a vassal through which they, in fact, rule over the population. They convince him to go to war, they convince him to sue for peace. They convince him to regulate. They convince him to spend on public works.

Governments are CUSTOMERS of bankers.

Like addicts are customers to drug dealers, or, more appropriately, like borrowers are customers to loan sharks, bankers never ever want their government customers to get any inkling of an idea that they a) won’t repay or b) won’t continue to borrow more.

It’s usury, but on a national scale. Why loan shark one citizen at a time when you can loan shark the entire population of a nation ?

Even though government could turn away from the bankers with 2 easy steps: a) pay off what’s owed but borrow not one more penny and b) aggressively prosecute them and get them put in jail and publicly reviled so they don’t start massive agitprop campaigns to push said government out of office.

National governments, being sovereign and thus having the right to coin their own money, could pay off national debts by simply creating their own money to do so. States and provinces, of course, don’t have that option, but must pay off only through the use of tax revenue.

What freedom it would be to have those debt monsters off our back.


16 posted on 02/13/2014 8:48:26 AM PST by PieterCasparzen (We have to fix things ourselves)
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To: Rusty0604

It may be off books, but it still needs to be repaid, or defaulted. This will destroy socialism.


17 posted on 02/13/2014 8:49:14 AM PST by Vince Ferrer
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To: Rusty0604

Do not fall for the ploy that these programs are “liabilities” in any typical business sense of the word. The left is hyping this up and conservatives are falling for it.

A political promise made by a politician is just that and carries no legally enforceable weight beyond the politician’s next election. SS is the best example. It can be ended tomorrow if a simple majority voted to end it. So it is with all of these “liabilities”. What the left is trying to do is take “promises” no matter how outlandish, sustainable, or constitutional and turn them into “liabilities” that must be funded.

Exhibit A is Social Security, B is public worker’s pensions, C is military pensions, and D is government bonds. Everyone one of these will be defended by the right and the left for different reasons.

Overlooked is that whatever is instituted by politics can be undone by politics. These future “liabilities” cannot be paid in full and therefore will not be paid. At some point there will be a political reckoning as to who wins and who loses.

I understand all of the I earned it, they are our heroes, it was taken from me, it’s all I have, the money was wasted elsewhere, I relied on the promises, I worked hard, etc.. But it does not change the fact that what one generation does another can undo...see Jefferson...and one generation cannot obligate the next for its debts...see Jefferson again.


18 posted on 02/13/2014 8:53:13 AM PST by FreedomNotSafety
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To: PieterCasparzen

...in Reuters’ own words, “the savings of the European Union’s 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis, an EU document says.” What is left unsaid is that the “usage” will be on a purely involuntary basis, at the discretion of the “union”, and can thus best be described as confiscation.

The source of this stunner is a document seen be Reuters, which describes how the EU is looking for ways to “wean” the 28-country bloc from its heavy reliance on bank financing and find other means of funding small companies, infrastructure projects and other investment.

http://www.zerohedge.com/news/2014-02-12/europe-considers-wholesale-savings-confiscation-enforced-redistribution


19 posted on 02/13/2014 9:03:03 AM PST by Rusty0604
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To: Rusty0604
"It releases one set of books to the rubes in the financial media, who are perfectly content to quote from it,..."

Of course they are. Most of the customers of investment advisors and managers are those who took the pensions from taxpayers by force of lobbies. It's like much bigger, fatter welfare by way of repeated robberies of taxpayers. That's one of the most influential constituencies I've so often mentioned.


20 posted on 02/13/2014 9:05:02 AM PST by familyop (We Baby Boomers are croaking in an avalanche of corruption smelled around the planet.)
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To: FreedomNotSafety

From the article:
“Alternative Fiscal Scenario. This forecast is what CBO actually projects future taxes and spending to be given not just the laws in place, but also how Congress and the Administration have been bending and changing the laws through time. In short, the Alternative Fiscal Scenario (AFS) is what the CBO thinks we’re facing absent a truly dramatic and sustained shift in fiscal policy.”


21 posted on 02/13/2014 9:05:45 AM PST by Rusty0604
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To: Rusty0604

Like I said what a politician promises another can unpromise. These are not “liabilities” they are politcal promises which are more like wishes.

If I borrow money (or my company) from you, or make a promise to you, I am obligated to pay it. I can have assets seized, my check garnished, or even go to jail if I engaged in fraudulent behavior towards you.

None of that applies to our governments. That is why it is called sovereign debt. It is debt issued by the sovereign and and is secured by the sovereign. Should the sovereign decide not pay there is no recourse.

CBO can say what they wish but their projections do not turn promises into liabilities in any normal sense of the word.


22 posted on 02/13/2014 9:15:24 AM PST by FreedomNotSafety
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To: I am Richard Brandon
How much inflation would you like today? Say “Pengo” - (No, not the game).”

Thank youfor remembering the game, Pengo. I enjoyed the Sega arcade version 30 years ago.

Unfortunately, Mr. North has a bad track record with his Y2K melt-down writings, though he did perform a useful service by getting people to prepare.

The problem with saying $200 Trillion in unfunded liabilities is that a lot of those liabilities (e.g. pensions and SocSec) might be 50 years down the line. If you told a 20 year old man in 1963 making $75/week that in 2013 he would be pulling well over $1,000 a month in social security, his jaw would have dropped. The main part of the problem is that the money itself does not have a fixed value, as we already have real inflation.

As we pay current liabilities, we continue to contract more unfunded liabilities. As long as we have a national debt, however, ALL new debt is unfunded, even if we have a general idea where the money is coming from.

We have a 50 trillion dollar economy, in current dollars. If we had a Reagan style boom, that could be 60 or 70 trillion, easily. A lot is made of the fact that we have the lowest levelof participation in the workforce that we have had in 35 years . . . or 1978 ... Jimmy Carter. We recovered from Jimmy Carter.

This does not mean I am optimistic. I'm not. There are no more boll weevil Democrats. The commie-hippies took over the Dem Party, and we have exchanged William Proxmire and Scoop Jackson for Patty Murray and Tammy Baldwin.

I can even see Nancy Pelosi playing that lady who burned down the mansion in Rebecca, rather than letting a new woman take over, laughing maniacally as flames engulf everything. (Great movie for those who haven't seen it.)
23 posted on 02/13/2014 9:26:11 AM PST by Dr. Sivana ("We are not sluts."--Sandra Fluke)
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To: Rusty0604; G Larry; MichaelCorleone; Errant; ctdonath2; blueunicorn6; Salvavida; PGalt; kabar; ...
A deluge of consequences to ensue if the voters don’t get it right in the next two elections.

How much do you want to bet we'll be presented with another Obama/Romney-style choice?
(That is to say, no choice at all: Romney is Obama's political clone.)
Heads we win, tails you lose.


IN THE GRIM DARKNESS OF THE FAR FUTURE THERE IS ONLY GOVERNMENT.
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24 posted on 02/13/2014 9:31:01 AM PST by OneWingedShark (Q: Why am I here? A: To do Justly, to love mercy, and to walk humbly with my God.)
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To: Rusty0604

I have 100, 50, 20 and 10 trillion dollar Zimbabwe banknotes for a grand total of 180 trillion dollars. I think I can cover most of it. You’re on your own for the other 25 trillion though. :)


25 posted on 02/13/2014 9:38:24 AM PST by xp38
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To: OneWingedShark

Obama/Romney-style choice?
Not so sure Soros may not be in the act this time the danger point is the low informed voter.


26 posted on 02/13/2014 9:42:01 AM PST by Vaduz
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To: Rusty0604
"It will be the end of the Keynesian welfare state."

Only until the next time. If Keynesianism was not invincible it would have expired in the 1940s.

27 posted on 02/13/2014 10:53:37 AM PST by Thom Pain (If you like your country you can keep it. Period.)
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To: MichaelCorleone

You have heard the term, ‘all the money in the world’. $200 trillion is more than all the money in the world.


28 posted on 02/13/2014 12:00:39 PM PST by fhayek
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To: Salvavida

All in due time. The debt increase will bury the Dems.


29 posted on 02/13/2014 5:22:59 PM PST by 1010RD (First, Do No Harm)
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To: 1010RD

No ... it will bury us all! A life boat has been sent, get in!


30 posted on 02/13/2014 6:31:15 PM PST by TsonicTsunami08
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