Posted on 12/30/2012 11:15:00 PM PST by neverdem
The fiscal cliff isn't as scary as the looming deficit and debt crisis about to swamp the country
All eyes have been on the clear and present danger of the fiscal cliff—understandably—but there's a sound in the mountain range that's even scarier than the cliff. It's the sound made by an avalanche, the trillions of dollars of debt that's heading our way, gathering speed and mass. For most people, it's out of earshot now, and that's the way our government prefers to play it in its financial statements. Liabilities are not set out there in accordance with the well-established norms of the private sector, where this overhang of liabilities would set off alarm bells in the markets, with boards of directors in emergency sessions.
We'll come to why that's not happening, but let's consider first why we should regard our predicaments as gravely as any private company does on the path to bankruptcy.
We are on a trajectory of cumulative fiscal deficits that cannot possibly be sustained. We have gone from being the world's largest creditor nation, with no foreign debt at the end of World War II, to the world's largest debtor, with roughly half of our public debt held by foreign lenders. Over the last four years, our national debt has grown by more than $5 trillion to over $16 trillion. We have to service that debt. The Federal Reserve is keeping rates historically low but here's the cost of paying interest on the debt for fiscal 2012: $359,796,008,919.49
What do you get for that? Nothing.
The greatest fiscal challenge to the U.S. government is not just its annual deficit but its total liabilities. Our federal balance sheet does not include the unfunded social insurance obligations of Medicare, Social Security, and the future retirement benefits of federal employees...
(Excerpt) Read more at usnews.com ...
Huey P. Long, Jr., said that when the American people got ready to embrace fascism, they would call the program in mind “anti-fascism.”
I wish Schmuckerman would have clued us in Before He voted for the one who stated in Plain sight he is Going to fundementally Transform The United States Of America
SS is taking in less money in FICA then it pays out so the US treasury must borrow that money from the Federal Reserve to make SS payments (buying back IOUS to itself) so in that way adds to the national debt.
What I find interesting is now that O is re-elected Democrats don't want to extend the FICA tax cut anymore and I heard lib MD House member Cummings on TV arguing that, but Obama is demanding extension of tax credits as part of his tax deal.
Yet for two years Dems been arguing on TV with little opposition that SS is fully funded for 15,20, 30 years into the future. But it turns out that they want the appearance that SS is pay as you go.
In the context of Zuckerman’s essay, I thought you were advocating more money printing and more debt.
I completely agree that technology is driving down costs.
And the ever increasing management efficiency of American corporations is remarkable.
The Internet is also driving a consumer knowledge revolution.
Price discovery and quality comparison are now second nature to millions of Americans.
It takes only a small percentage of highly informed customers - maybe 15% - to completely transform the market for most products.
Oh and you think then transactions would go unreported.
I own a business. My business collects sales tax on taxable sales and at the end of each quarter, reports the gross taxable sales and forwards that money to the State of Texas.
No names are known. What was bought is not known to the state and the only thing they want is the money that I (as a collector for the state)forwards back to them.
The system has been in place in every state for many, many years and works well. The best part is the customer does not have to report anything he buys to the government.
The system is already in place. All that needs to be done is to kill the IRS and use the existing retail and wholesale businesses to handle the taxes as is done now.
I think you ought to lay off whatever you are smoking for awhile.
I live in California, which you did not check before posting. I've owned a business. I've collected sales tax. We have a 9% sales tax already here. Add 35% more for a Federal tax. Now we're at nearly 50% tax. At that point, people will cheat a lot more than they already do.
With a Federal sales tax, there will be a black market, just as there already is in cigarettes and alcohol if you hadn't noticed. So apparently it is you who needs a shot of reality.
I agree.
So true. Socialists propaganda machine will demonize any anti-socialist. DEFUND Big Bird (PBS)...(look at the ruffled socialist chicken-shiite feathers)...a million Big Turds will march on D.C. That would be target-rich IMO. DEFUND all their collectives foreign and domestic. We will live free AND prosper.
Since we print out own money and loan it to ourselves bankruptcy isn’t possible.
Welfare state with hyper inflation —Weimar Republic
I agree. This debt is killing us. Congress has to take IMMEDIATE action to cut it,
but not cutting my SS or medicare, I paid into those, nor my unemployment comp, I worked for that, and don't raise my taxes either,
cant you just raise taxes on those that don't need it and cut waste fraud and abuse? And stop foreign aid? Except to countries I like,??
We all know the solution, why doesnt congress act?
Zuckerman voted for Obama in 2008.
That is what makes Zuckerman's article all the more interesting.
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