Wednesday, October 24, 2007

Update on Government Theft

In yesterday's post, I gave a conservative estimate of government fraud at $60 trillion.

This morning I came across a more recent figure, given by Richard W. Fisher, CEO of the Federal Reserve Bank of Dallas:

Fiscal Issues: From Here to Eternity - Richard Fisher Speeches - News & Events - FRB Dallas

Fisher is President and CEO of one of the 12 Banks that operate the Fed's payments system business. He chairs the Fed's Information Technology Oversight Committee and sits on the Federal Open Market Committee, which is "responsible for crafting a monetary policy designed to foster sustainable noninflationary economic growth." Its actions are what the press and financial analysts love to bill and coo about. The Fed moves $5 trillion per day between financial institutions to settle their accounts. Fisher says:

According to official government trustee reports, the infinite-horizon discounted present value of our unfunded liability from Social Security and Medicare—in common language, the gap between what we will take in and what we have promised to pay—now stands at $83.9 trillion.
This staggering deficit portends conflict, chaos, and a Great Depression.

Imagine that General Motors settled a strike with United Auto Workers by promising huge pensions and health benefits to workers in retirement, yet accountants revealed that GM would be unable to pay those promised benefits. The strikers would not be happy. GM's credit rating would turn to junk bond status. Oh, wait . . . no need to "imagine" that:

General Motors Runs Over the Experts

Washington D.C. is a "junk bond" government. Used car salesmen are less ethically-challenged than federal politicians.

Politicians are liars and buffoons. A liar makes a promise that can't be kept. A buffoon just stands there while his colleagues continue to lie, when millions of people are depending on promises that won't be kept. Speaking to 4,000 students at BYU, Senate Majority Leader Harry Reid

reminded the students that government can be our "friend," and cited throughout his speech numerous government programs as successes. "For example," he added, "Social Security is the most successful social program in the history of the world."
Would you write a check to a person and say, "Here's something to provide you with income security when you retire," knowing you didn't have the funds to honor that check? Would you vote yes on legislation which did the same thing on a scale billions of times larger? Who are these people who can vote for such bills without pangs of conscience? And far from keeping these misdeeds quiet, they boast about them, publicly campaigning on them: "Vote for me! I voted to give you a check that will bounce!" The poor and the elderly are going to be shafted to the tune of $83 trillion. Or the rich and middle class are going to be divested of everything they've worked for all their lives. Politicians are Liars. Irresponsible buffoons.

But we’re a big country, so let’s look at it on a per-person basis. If you divide the $83.9 trillion evenly among the 300 million U.S. residents, you get a per-person liability of $280,000—more than five times the average household’s annual income. Each of us would have to pay that much today if we wanted to guarantee the solvency of our entitlement system for future generations.

Let me put it yet another way. The total unfunded liability from these programs encompasses about 7.5 percent of U.S. GDP from here to eternity, which works out to 68 percent of all federal income tax revenues from here to eternity. So instead of paying $280,000 per person now, we could permanently sequester 68 percent of all current and future income tax revenue for use only on Social Security and Medicare. Or we could permanently raise income tax rates by 68 percent to accomplish the same thing—although we’d actually need to jack it up even higher because a large tax hike would probably discourage some people from working.
"Discourage some people from working" is a pleasant eupehmism for what could be a lot more unpleasant. Imagine the reaction of the auto workers when they find out that all the promised benefits they worked for are an illusion, or that all the wages they've worked for must be returned. The question I asked yesterday was How will tax-payers react to a seizure of $280,000 per person? Or the flip-side of the coin: How will tax-feeders react to a denial of promised benefits amounting to hundreds of thousands of dollars? Will they have the moral fiber to resist a violent protest of this massive transfer (or non-transfer) of wealth?

It turns out, Fisher reports, that Medicare Part D, Bush's unconstitutional prescription drug benefit plan, will be more costly than all of Social Security.

The promises made by government politicians are fraudulent. The federal government had no authority under the Constitution to make these promises (even if they had the money to honor them), and politicians who took an oath to "support the Constitution" violated that oath by supporting these unconstitutional promises. They all know about the social security problem. Their failure to confront the inevitable problems caused by these massive and fraudulent promises is reprehensibly irresponsible, deliberately avoiding the heat, hoping to get out of office with a comfortable government pension before the fraud is uncovered and future generations have to deal with the chaos. Politicians are liars -- but "We the People" seem to like it that way.

This is an issue that "separates the men from the boys." Any politician who just "goes along to get along" and does not speak out about this massive fraud should be turned out of office. Every voter should be a "single issue voter" on this issue. Voters should not vote for any politician who does not support the concept of the Constitution as a document of "enumerated powers," and who does not speak as forthrightly about the terrifying bankruptcy of the United States as Dallas Fed CEO Richard W. Fisher.

Just don't vote for them.

"But if I don't vote for X, Y will win," you say.

And Y is going to be worse than the X-created $83.9 TRILLION??

You should not vote for someone who does not have the ethical integrity to avoid making fraudulent promises, and lacks the foresight and the guts to speak out about the dangers of false promises already made.

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