THE LIBERTARIAN ENTERPRISE
Number 524, June 21, 2009
"SOCIALISM IS FOREVER"
What May be Expected of a Three Trillion Dollar Deficit?
Special to The Libertarian Enterprise
What is the budget deficit? Simply put, it is the amount the national government spends above the amount it brings in to the general fund by stealing. Taxation is theft.
How big is it likely to be? You'll get different answers from different people. But, I went to the national debt clock on the Concord Coalition web site. I think they are sincere about the budget deficit and national debt. Here is that link:
So, then I ask myself, how long to increase the debt by a million dollars? Get out the stop watch, wait for the millions digit to increment, start the timer and wait for it to increment again. Ten seconds. Try it again with five million dollars. Fifty-three seconds. That makes 10.6 seconds per million. Do it again for another five million to be sure. Comes up 53 seconds again.
Let's multiply. There half to be 5.66038 million dollars added to the debt every minute. Which gives us 339.62264 million an hour. A bit over 8.15 billion a day. Very close to 2.98 trillion in a year. And that's today. The debt clock is accelerating, due to the increasing costs of interest payments. The yield curve currently indicates that investors are expecting higher interest rates.
The base number as I write this note is $11.477 trillion. That doesn't include a whole bunch of anticipated future liabilities like socialist insecurity and medicare. But add $2.98 trillion and you get about $14.5 trillion. In other words, within a year from now, the national debt will be about equal to, or greater than, the gross domestic product.
Raise your hand if you think pay as you go budgeting (Paygo) is going to fix the budget deficit any better than Carter's zero baseline budgeting in the 1970s. Or the Gramm Rudman debt limit game that started in 1985. Note that the Congress has voted to increase the national debt "cap" every year for 14 years. Is this holding the line on the national debt? Nope.
The reality is that the national budget this year is about equal to the increase we can anticipate, at the current rate, in the national debt in one year. And the national budget might rise, since all sorts of limitations and expectations are figured inlimits on unemployment, new jobless claims, expectations of economic growth rather than shrinkage, expectations of more tax dollars rather than much fewer.
How does it affect you? It should tend to raise interest rates. However, the government and the Federal Reserve are extremely reluctant to raise taxes or interest rates, given the weak economy. Raising interest rates by 5% or 10% could double or triple the real numbers of unemployed, arguably approaching 20 million at this point, depending on whose numbers you believe.
So if interest rates are kept artificially low, the main alternative is to print more money. If that happens, prices should rise. We're already seeing much higher oil prices than we had in December 2008.
From a price in December 2008 of about $30 per barrel, we've recently seen the price rise to over $70 per barrel. So, in about six months, the price has risen by about 133%. Annualise that by doubling it and you get 266%using simple inflation only. Compound it month by month and the figures go well above a thousand percent increase per annum.
So, this time next year, a barrel of oil could be $186, or as high as $700 a barrel, or more. Stock prices are probably now reflecting hyperinflation, too. They could go much higher. But your government pension won't change much, because the government's policy is to lie about inflation. Grandma won't be getting more money in her social security payment nearly as fast as her spending power is wiped out.
To whom does this debt belong? Many people, including the Concord Coalition, say it belongs to me and thee. Each household in the country owes so much. Or, figuring 305 million population, the current $11.5 trillion works out to about $37,700 per person. And the deficit should add about $9,700 within a year. Which is getting very close to the per capita gross national product, or average income per person.
In other words, the government claims that it could take everything you make in one year, from everyone, and pay off the debt. What you do for food and shelter in that year, well, they don't say.
But I say it isn't my debt. I never agreed to it. I didn't vote for any of these lying politicians. I didn't sign anywhere to guarantee the debt they incur through their spending. The politicians in Congress and the president vote for the spending and sign the budget into law. I don't.
It is not my debt. I don't need to repudiate it because it was never my debt. There is no magic adhesion contract. There is no secret agreement that I've become bound to without knowing itthere can be none.
An agreement is entered into willingly, knowingly, competently, and with exchange of value on engagement. Otherwise it isn't a contract. I never signed up for the national debt. It isn't my problem.
It isn't your problem either. Don't be deceived. The debt is the problem of the oligarchy that rules the country and pretends to be masters of us all. Break your chains. Run away, slaves.
Refuse the debt. Refuse to pay it. Let the lying politicians and bureau-rats pay it.