Unfunded future liabilites question

Good question, I figure that the Rubicon is within sight. There is a stress point which will be well before bankruptcy, where increased taxation, printing more money, borrowing more money simply won't function.

At this stage, there will be a huge debate during the election and debate that amounts to little more than pointing fingers. In the end, it will be a decision a mandatory assimilation of all "essential services" by government or deregulation on a massive scale. The former will condemn us to an eternity of indentured servitude while the latter option would be a catalyst for returning to a more libertarian mindset.

What is the breaking point? I don't know...when money is worthless, nations won't lend America money and the American taxpayer simply cannot be taxed anymore. Each additional "unfunded liability" makes the probability of completely Totalitarian American government more likely.

It is possible that we have crossed the Rubicon, now that over 50% of Americans receive more benifits than they pay in taxation. It will be difficult, if not impossible for anyone usurp a power in a democracy where more than 50% of the population are being bribed by the government.

Obama's new Healthcare legislation, will push more people into this category, and we will begin the rapid descent into socialism because the majority of people will rule the nation as a democracy (read mobacracy) rather than as a Republic, where the reigns of government are held in check by Constitutional Law.

So maybe we have 15 years because as the dollar loses value the government must use more force to convince us to use it as our primary currency (using legal tender laws). I think that if you graphed the history of inflation, you would see that inflation often parrallels the erosion of freedom. It is a necessity that this is so.

The existence of a Central Bank using FIAT currencies makes must cause an eternal decline in freedom. I was going to write an extended essay uses historical facts and mathematics to support this argument, given time, maybe I still will.

The numbers are generated from anticipated operating expense, they are not genuine liabilities. They tally the costs of Medicaid and other services, but they are not actually listed as liabilities on the books. The congress will not allow them to be listed because these are expenses that can be cut at any time, meaning they are not genuine liabilities. The government is only liable if they decide to pay the money.

Meaning the unfunded liabilities # is actually not a reflection of impending bankruptcy, but rather an indicator of the likelihood of increased inflation (as we print money to artificially sustain the services) and deteriorating services (as the programs are cut to maintain viability).

This is published proof that the Austrian economists are correct, and a socialized system is not one that lowers costs and does not provide the constant improvement of private industry. Rather it means, we will definitely have our purchasing power and earning potential eroded by money printed to prop up socialized services and they are predicting that those socialized services will be unsustainable at the current level of service in the future.

This means we will need to work harder for less. We'll be poorer and have less medicaid, reduced social assistance etc.

That's all that number means, you can't lose your income or assets based on these services, which is why they are not on the government books. They are not considered genuine liabilities...they are planning to, and indeed they must cut them whenever it suits their budget.

that's if we add zero new programs. So, how do we pay for promises made?

http://en.wikipedia.org/wiki/Monetization

Monetizing The Debt

In the United States, and in many other countries, the government does not have the right to issue currency to pay its bills. In this case the government must finance its deficit by issuing bonds to the public to acquire the additional funds to pay its bills. However, if these bonds do not end up in the hands of the public, the only alternative is for them to be purchased by the central bank. For the bonds not to end up in the public hands the central bank must conduct an open market purchase. This action by the central bank increases the monetary base, through the money creation process. This process of financing government spending is called monetizing the debt.[1] Monetizing debt is a two step process where the government issues debt to finance its spending, the central bank purchases the debt from the public, and the public is left with high powered money. When government deficits are financed through this method of debt monetization the outcome is an increase in the monetary base, or the money supply. If a budget deficit persists for a substantial period of time, then the monetary base will also increase, shifting the aggregate demand curve to the right leading to a rise in the price level.[2]

To summarize: a deficit can be the source of sustained inflation only if it is persistent rather than temporary and if the government finances it by creating money, {through monetizing the debt}, rather than leaving bonds in the hands of the public.[3]

June 2009
http://mindovermarket.blogspot.com/2009/06/bernankefed-has-n...
"Federal Reserve Chairman Ben Bernanke today told Congress that the central bank has no plans to monetize the sharply rising deficits of the United States and defended the Fed's program to purchase Treasuries. He told Congress of the need for Washington to control spending and set appropriate tax levels, in consultation with the American people, to achieve 'fiscal sustainability' in the long term. By that he meant a situation where the ratio of government debt service to the size of the economy is stable or declining."

China and other holders of US debt are about as cheerful as a cat in a dog show regarding our situation. See the post below about yesterday's debt auction.

How's our credibility holding up in China?
http://www.reuters.com/article/companyNewsAndPR/idUSPEK14475...
"Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.

His answer drew loud laughter from his student audience, reflecting scepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.