by: John Koraska
Debtism - The Legacy of Perpetual Debt is the American government's bequest to its hard working people. The practice of debtism has caused the USA to become the world’s leading Debtor Nation. This did not happen because the nation is poor or in recession. The path from creditor nation to debtor nation is the direct result of faulty tax and welfare schemes that reward debt, penalize savings and erode the rights of a free people. The Social Security program provides prima facie evidence of how the U.S. economy has evolved from a system of ownership and free enterprise to socialism and debtism.
Warning of Perpetual Debt
“I place economy among the first and most important virtues and public debt as the greatest dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt. If we can prevent the government from wasting the labor of the people, under the pretense of caring for them they will be happy.”
Thomas Jefferson
United States of America - Debtor Nation
Recently, the cap (debt limit) on official U.S. debt was raised to $8.2 trillion (12 zeroes). Government’s power to transfer wealth from one to another (regardless of equity or need) has grown exponentially since the advent of Socialism during the last Great Depression.
It took this nation 205 years (1776 – 1981) to accrue $1 trillion ‘on-budget’ national debt. It has taken only 23 years (1982 - 2004) to add an additional $6.5 trillion. On Dec 28th, 2004, the, on-budget (official) debt was $7,536,267,845,909.18; but this is just the tip of the iceberg. Under-funded or un-funded government liabilities amount to a significant multiple of the official debt. Recent studies provide a flavor of the almost inestimable trillions in shortfalls. An example:
The Treasury Papers, a study that former Treasury Secretary Paul O’Neill commissioned record:
"A fiscal gap (the present value difference between government’s projected expenditures and receipts) of over $44 trillion – now more than $50 trillion thanks to the new Medicare drug benefit. Almost all the un-funded debt is a consequence of Social Security Retirement and Medicare benefits. Medicare now faces an imbalance exceeding $36 trillion. That is the amount of money in present value that Medicare is projected to pay out for future benefits in excess of the money in its trust fund, plus the money it is projected to collect in future taxes and premiums. Social Security's imbalance exceeds $7 trillion”.
These estimates do not include inadequate funding of the military and Civil Service retirement programs, Supplemental Social Security (SSI) nor the Medicaid program that is growing faster than Social Security. While adverse consequence of Debtism is already being felt by millions of Americans, the worse is yet to come. Under current tax and welfare schemes, those who save and contribute to Social Security, IRA’s, 401k’s, etc. will increasingly subsidize those who do not. Only significant changes in law or those who enact them can alter the trend toward a welfare state.
Debtism n 1. A corrupt economic system that increase debt and reduce saving by reward and punishment, incentive and disincentive. 2. A tax system that destroy thrift (saving) and encourage profligacy (debt). 3. A practice of perpetual government borrowing to sustain a consumerist driven economy until the currency collapses. 4. Demonetized, fiat currency (no gold or silver backing) that decreases in value over time. 5. Trust Funds overflowing with debt instead of certificates of ownership (i.e. stock and bonds).. Exemplified by pyramids of debt at all levels of society, erosion in capital formation and meager savings by the general public and long lines at bankruptcy courts.
See http://www.debtism.com for more articles on social security.