On January 10, 2019, RealClear Politics published an article titled, “Unfunded Govt. Liabilities — Our Ticking Time Bomb” by Myra Adams (A media producer and writer who served on the McCain Ad Council during the GOP nominee’s 2008 campaign and on the 2004 Bush campaign creative team.)
Like all these previous articles comparing the federal debt to a ticking time bomb, the article was utter nonsense.
Here are some excerpts and comments:
Tick, tick, tick goes the time bomb of national doom. Every second the ticking grows louder, but you won’t hear the muffled sound that’s more akin to white noise.
The doom of which I speak is unfunded liabilities — $122 trillion in payments the government owes and has promised its citizens — without the funds to fulfill those obligations.
Across all media platforms, the threat goes largely unreported. Members of Congress from both parties are also deaf to the ticking.
The same is true at the White House, where Donald Trump, like Barack Obama before him, never mentions this impending catastrophe.
Oh, my. “Time bomb of national doom.” Hyperbole usually is used when facts are absent. That is the case with Ms. Adams’s article
“My goal is not to chase a balanced budget just for the sake of balance. My goal is how do we grow the economy, put people back to work, and if we do that we are going to be bringing in more revenue.
“If we control spending and we have a smart entitlement package, then potentially what you have is balance – but it is not balance on the backs of the poor, the elderly, students who need student loans, families that have disabled kids.
“That is not the right way to balance our budget.”
In short, Obama believed the debt was too high, but didn’t want to make the middle classes and the poor suffer, which by the way, is the only way to stop the “time bomb of national doom.”
Why? Because that so-called “time bomb,” consists primarily of federal deficit spending — the “unfunded liabilities” for entitlements — Social Security, Medicare, Medicaid, poverty aids, education aids, and everything else the government does to help the middle classes and the poor.
And, Obama knew that cutting these programs would be a political disaster. Sadly, he didn’t reveal that cutting deficit spending also would be an unnecessary economic disaster.
The article continues:
Among the hordes of 2020 Democratic candidates, count on the time bomb to be a topic non grata while Medicare-for-all gains momentum and Medicare-as-is remains a lethal bomb component.
Before you call me an alarmist, I refer you to the U.S. Debt Clock. Here you can watch our time bomb tick in real time with that $122 trillion in unfunded liabilities as one of the major “fuses.”
Ah, the inevitable, phony debt clock sign, which is funded, and then referred to, by those least knowledgeable about economics.
And notice those words, “YOUR family share.” Ridiculous and a lie. Your family does not owe a penny.
Your parents never paid a penny for past federal debt; you will not pay for the present federal debt, and your grandchildren never will pay for the future federal debt.
Not one tax dollar ever is used to pay for the federal debt. This is explained later in this post.
Then the article becomes truly childish in its attempts to shock you:
Surely, such an incomprehensible number makes you gasp. But now, get ready to gag because in 2023 the “Debt Clock Time Machine” projects unfunded liabilities will be $157 trillion, a $35 trillion increase in only four years.
I would wager that a majority of citizens have no concept of what “just” $1 trillion looks like or even means. For the record, one trillion is 1,000 times 1 billion.
And, since $1 billion is thrown around Washington like a rounding error, it is instructive to remember that 1 billion itself is 1,000 times 1 million.
OMG! I’ll bet 1 million is 1,000 times 1 thousand! Am I right, Ms. Adams?
The Debt Clock displays federal tax revenue at $3.3 trillion, but spending at $4.2 trillion.
This annual imbalance means that not only are we promising too much down the road, we can’t cover our current costs, and we fall behind even more — every second of every day.
No, what it really means is the federal government is pumping .9 trillion growth dollars into the economy — dollars that go into the pockets of Americans. Without federal deficit spending, the economy would fall into recession or depression.
The so-called, misnamed federal “debt” was only $40 billion in 1940, and now, 80 years later, it is near $20 trillion.
And every year, for those last 80 years, writers like Ms. Adams have been calling it a “ticking time bomb.” (See: “It is 2019, and the phony federal debt “time bomb” still is ticking.”)
Strangely, it never seems to occur to the Myra Adamses of the world, that the “bomb” never explodes.
Being wrong for 80 consecutive years is a strong signal to change your mind. But they just keep on shoveling the bullsh*t.
And now we come to the “solution” that the rich want you to believe is necessary: Cut benefits to the middle and the poor.
Here it is, as delivered by Ms. Adams:
Reducing Social Security benefits — the main driver of unfunded liabilities — will be painful now, but even more painful in 2034 when present inaction forces draconian cuts.
What if every news network continuously displayed the $122 trillion unfunded liabilities debt clock — all 15-digits rapidly ticking in real time — at the same corner of the screen?
Perhaps then, when the public is fully aware of the problem, our leaders will be forced into discussing very tough and real solutions followed by legislative action.
But doing nothing is not an option.
What a marvelous idea. Every news network continuously displaying the most misleading piece of crap imaginable, just so the rich can get richer.
How does that make the rich richer? By making the middle classes and the poor poorer. “Rich” is a comparative term. The greater the Gap between the rich and the rest, the richer that makes the rich.
If you have $1 million are you rich? Yes, if everyone else has $1 thousand; no if everyone else has $10 million. It’s the Gap that determines whether or not you are rich.
Widening the Gap is exactly what the rich want. It’s called Gap Psychology: the desire to distance oneself from those below, and to approach those above.
Here are the facts:
1. The U.S. Federal government is Monetarily Sovereign. It has the unlimited ability to create its sovereign currency, the U.S. dollar.
Former Fed Chairman Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”
Former Fed Chairman Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.
2. Get it? No matter how much the federal government owes, it simply creates the dollars to pay its creditors. Even if federal tax collections were zero, the federal government could pay its bills, forever.
3. Not only that, but the so-called federal “debt” isn’t a real debt. It is the total of deposits into Treasury Security accounts (T-bills, T-notes, T-bonds).
The government doesn’t touch those dollars, because having the unlimited ability to create dollars, the federal doesn’t need to use the deposited dollars. So these accounts are paid off upon maturity, simply by returning the dollars to their account owners.
Thus, the sole effect (and possibly the sole purpose) of the “National Debt Sign” is to fool you, the public, into docilely accepting cuts to your federal benefits, just as the rich want.
People who use that debt clock sign to “prove” the supposed unsustainability of the federal debt either are ignorant of economics or are being intentionally deceptive.
It’s one situation or the other.
Ask Ms. Adams which is hers.
Rodger Malcolm Mitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell
The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.
Implementation of The Ten Steps To Prosperity can narrow the Gaps:
Ten Steps To Prosperity:
2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone
3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)
4. Free education (including post-grad) for everyone
5. Salary for attending school
6. Eliminate federal taxes on business
7. Increase the standard income tax deduction, annually.
8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
9. Federal ownership of all banks
10. Increase federal spending on the myriad initiatives that benefit America’s 99.9%
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.
9 thoughts on “Unfunded Govt. Liabilities — Our Ticking Time Bomb? Nah!”
Excellent post. The entirety of the national “debt” was distributed into the economy just not in a way that could most effectively and actually assist the free flowingness of it.
This is why the new monetary paradigm of Abundantly Direct and Reciprocal Monetary Gifting distributed in the forms of a universal dividend and a 50% consumer discount that is rebated back to the enterprise gifting it to the consumer is the way create and distribute the incredible productivity a modern economy is capable of.
A 50% consumer discount on what? Housing? Healthcare? Education? Food? Clothing? Travel?
Cutting the prices of everything for everyone, by 50% doesn’t sound like a powerful solution to inequality. For the poor, it isn’t enough. They still will be poor, because “poor” is a comparative. Average consumer prices in 1982 were half of what they are today, yet we had excessive inequality then, too.,
Also, many of the poor can’t even afford to pay 50% for what they need.
For the rich, it means yachts and high-price condos will cost less, though still unaffordable to all but the rich.
I suspect it only will complexify an already maddingly complex tax system.
I prefer the Ten Steps to uplift the poor and middle.
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The 50% discount/rebate policy makes a $1000/mo. universal dividend able to purchase $2000/mo. of goods and services. Inequality is a relative concept and IS a problem when the system is scarce on individual income.
The new monetary paradigm of Abundantly Direct and Reciprocal Monetary Gifting changes the entire pattern of individual scarcity into relative abundance for all.
Such direct monetary distributism also has many, many “knock on” benefits like income tax reduction and the complete elimination of transfer taxation as in your list of ten steps.
An important thing to consider is that monetary abundance enables us to integrate the economic interests of both the individual and enterprise which would integrate these traditionally opposed political constituencies.
Structural changes are very important. A genuine paradigm/pattern change is at least an order of magnitude greater beneficial occurence.
Thanks chdwr for your comments. A couple questions:
Would everyone receive the 50% discount? For instance, would the $100K BMW then cost $50K, while the $20K Hyundai then cost $10K? If so, how does that solve inequality?
How does it create “relative abundance for all” if the relationship stays the same?
How does it cause income tax reduction?
How does it “enable us to integrate the economic interests of both the individual and enterprise”?
Finally, I’m sorry, but I have no idea what your very last sentence meant.
Yes, each and evry consumer good is reduced by 50%
Inequality is a problem of individual and systemic income scarcity and is largely eliminated by abundance. When the system has relative abundance there is no longer a need to make complete income equality a rigid moral cause. That does not mean it is not a potential problem that needs examination.
Direct monetary distributism enables the government to directly fund itself. Some income taxation is necessary or individuals and enterprise will swiftly realize that they do not have to obey any of the economic and monetary regulations of the government, but again, with direct funding the levels could be greatly reduced. Such reductions leaves the possibility of punitive taxation for capitalist economic vices like arbitrary price and asset inflation without actual cost increases by commercial decision makers. Socialist re-distributive taxation is stupid and unnecessary in a directly distributive monetary paradigm.
A 100% increase in everyone’s potential purchasing power is just as much in the interests of commercial agents as in individual’s, hence its implementation as policy is integrative of their political interests as well.
All paradigm changes are entire pattern changes. A structural change is a limited/specifically targeted change. Nothing at all wrong with them per se of course in fact a structural change from private money creation by profit making banks is necessary because it violates Occam’s Razor and Lord Acton’s dictum that power corrupts and absolutel power corrupts absolutely. A publicly administered banking and financial system must also be firmly guided by an unimpeachable ethic like the natural philosophical concept of monetary grace as in gifting which is the concept behind the new monetary paradigm. Here is the link to my book if you’re interested:
I’m not sure how inequality is “largely eliminated by abundance.” America has abundance — for the rich and even for the middle classes. But the rich have enough money to buy politicians, media writers, and economists. Cutting the cost of goods and services will not change that power dynamic.
But I am glad to have helped you promote your book.
Surprise! The GOP, the party of the rich wants to cut roughly 3 million people off food stamps.
Who could have predicted that?
Next? The poor will go out and vote for Trump. Count on it.
Uh, from your previous articles, and from simple math, I think you meant to say 1940 instead of 1970 in this sentence:
“The so-called, misnamed federal “debt” was only $40 billion in 1970, and now, 80 years later, it is near $20 trillion.”
Other than that, spot on. Could someone create a more truthful clock than the debt clock, say, a Monetary Infusion Clock, that would show how much money the Federal Government has pumped into the economy since 1940 (or even 1837, when the American “debt” was last paid off by President Jackson), and how much each family has received since then?
Thanks, Scott. Good idea. The net “infusion” would be the same amount as the misnamed “debt.”