I have written several articles on the national debt as the biggest threat to our national security. I have given numerous lectures on the subject and every time, during the Q and A time, professionals astonished me with their naiveté. Liberals always post unkind and downright insulting commentaries to my articles, accusing me of being a “tool” of the one-percenters and a paid advocate of the rich. Nothing could be further from the truth.
You do not have to understand all the intricacies of economics, the machinations, and the manipulation of statistics, the market speculation and derivatives to realize that, if you were to run your own household on a constant deficit that is quadrupling in four years, you are in terrible trouble and are going bankrupt.
Our Gross Domestic Product (GDP) is approximately $15.5 trillion but we spend $6.4 trillion at the federal, state, and local levels, making our gross debt to GDP ratio almost 106 percent. We are not Greece, Spain, or Portugal but we are on our way. I use the word “approximately” because these figures change constantly. (http://www.usdebtclock.org/)
I realize that, unlike Greece, Spain, Italy, or Portugal, we can print or create our own currency out of thin air since we are still in control of our monetary policy via the Federal Reserve System while the Mediterranean countries must depend on the monetary policy of the EU, coming from Brussels.
The U.S. total debt is almost $58 trillion, personal debt is $16 trillion, mortgage debt is $13 trillion, student loans $932 billion and credit card debt $846 billion. The U.S. debt on interest alone is $4 trillion.
I realize that the student loans have been nationalized and President Obama has plans in place to forgive this debt in exchange for service in poor areas, after 5 years of minimum payment, or by an executive order. However, the overall taxpayers would be responsible to pay any forgiven student debt. How would the students and their parents feel when they paid off college debt without any help from Uncle Sam? Where is, as the liberals like to say, the “social justice?”
There is a level of debt that has been relatively constant and is a hot potato for politicians who want to be re-elected – unfunded liabilities. An unfunded liability is an expenditure that will occur in the future for which there are currently no reserves set aside or in a lock box – the money must be spent as it comes in as revenue. Revenue of course, cycles with taxation levels, booms and recessions in the economy, and the level of spending that the federal government is engaging in. The Social Security liability is almost $16 trillion, the prescription drug liability is $21 trillion and the Medicare liability is $ 84 trillion – a total of $121 trillion U.S. unfunded liabilities.
A very important question should be asked by any thinking American, can we afford the huge, not yet fully known cost of the unfortunately named the Affordable Care Act (a.k.a. Obamacare) on top of these unfunded liabilities? Is the free market not the best alternative if we make needed changes to private plans such as portability across state lines, elimination of certain pre-existing conditions, and tort reform? Do we have the money to grow the federal government’s already out of control spending and to satisfy the ever increasing demand for entitlements from the winning electorate?
The Federal Reserve monetary base is approximately $2.7 trillion. The M2 money supply is $10.4 trillion (cash, savings, and small time deposits such as CDs). The Treasury securities (T-bonds, T-bills, and T-notes) add up to $1.2 trillion. The most bothersome part of the Federal Reserve Monetary Base is the currency and credit derivatives at a whopping $632 trillion. The most common types of derivatives are: forwards, futures, options, and swaps in underlying assets such as commodities, stocks, bonds, interest rates, and currencies. Since it is highly speculative, it is highly volatile as well, as witnessed by the housing crash based on investment in bundled mortgages of good and insolvent mortgages.
Uninformed liberals viciously attack and slander the credibility of people like me who report that our national debt is the number one threat to our national security. Would they attack the one page ad (page A13) and its signatories as it appeared in the Washington Post on December 5, 2012, “Addressing Our Debt is a National Security Imperative.”
The message from the newly formed Coalition for Fiscal and National Security (www.FiscalAndNationalSecurity.org), sponsored by the Peter G. Peterson Foundation, asks that the fiscal cliff resolution by the end of the year should contain:
– Stabilization of the debt as a share of the economy on a “downward path for the longer term” because our global leadership is threatened if we accrue national debt faster than we grow our economy
– Substantial deficit reduction over the next ten years with “parameters for longer-term fiscal reform, including future levels of debt as a share of the economy, and a date by which the budget must balance”
– Tax reforms to raise more revenues through “eliminating deductions, increasing rates and/or more fundamental changes to our tax code”
– “Changes to entitlements on a sustainable long-term path”
– “Changes to defense and other discretionary spending, while protecting the most vulnerable”
– “Congress and the President should agree on an expedited process to enact legislation reflecting this framework in 2013, in the truest form of patriotism – putting our country first”
I am not privy to defense strategy but I see the rising military threat around the world and the anti-American sentiment coupled with terrorist attacks. I believe in the Roman strategy of “Si vis pacem, para bellum,” “If you want peace, prepare for war.”
I am skeptical of the Coalition’s last statement, “In our judgment, advances in technological capabilities and the changing nature of threats make it possible, if properly done, to spend less on a more intelligent, efficient and contemporary defense strategy that maintains our military superiority and national security.” Somehow, getting rid of a substantial amount of Marines and soldiers, mothballing naval resources, and cutting nuclear arsenal when others around the world are building more, do not seem like good ideas. I could be wrong.
The signatories to this coalition are former government officials who have served during eight Presidential administrations, Democratic and Republican, and “strongly believe that our long-term debt is the single greatest threat to our national security”:
– Admiral Michael G. Mullen, Coalition Chairman and former Chairman of the Joint Chiefs of Staff
– Samuel R. Berger, former National Security Advisor
– Sam Nunn, former Chairman of the Senate Committee on Armed Services
– Ike Skelton, former Chairman of the House Committee on Armed Services
– Madeleine K. Albright, former Secretary of State
– Harold Brown, former Secretary of Defense
– Robert M. Gates, former Secretary of Defense
– Paul O’Neill, former Secretary of the Treasury
– Paul Volcker, former Chairman of the Federal Reserve
– James A. Baker, III, former Secretary of State and the Treasury
– Zbigniew Brzezinski, former National Security Advisor
– Henry A. Kissinger, former Secretary of State and National Security Advisor
– George P. Shultz, former Secretary of State and National Security Advisor
– John Warner, former Chairman of the Senate Committee on Armed Services
What will liberals say who love entitlements and are unwilling to give up an inch of their cradle to grave mentality? They believe that taking care of their every need is a birthright. They should not have to care for themselves as self-reliant Americans have done for generations. They are the Entitled Generation.
The problem is that the Entitled Generation is running the country into the ground. As Dr. Thomas Sowell so eloquently stated, “I have never understood why it is ‘greed’ to want to keep the money you’ve earned, but not greed to want to take somebody else’s money.” I would call it theft and enslavement of the producers.