Monday, July 09, 2007

Our Government is Our Own Worst Enemy

Pretty provocative title, isn't it? You may be thinking I'm going to rant about the Presidentidiot, or maybe about one or more of the boneheads in his executive branch, or the Supreme Clowns, or those people who probably searched my wife as she traveled by air today - but I'm not. I'm going to slam the republicans, the democrats, the bureaucrats, the governors, the think tanks - everybody who has a hand in guiding our nation. They are all complicit in a vast conspiracy that has a good probability of reducing our country to a weak shell of its current state. It's the conspiracy of ignoring the financial mismanagement of our nation, and the accusation is made by none other than David Walker, Comptroller General of the United States.

I quote from David Walker's interview on "60 Minutes" last night. "I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan but our own fiscal irresponsibility," Walker tells Kroft (the "60 Minutes" staffer).

What is the problem? Simply stated, the United States has about $30 trillion - that's right, $30 trillion - in unfunded liabilities. The largest of these is Medicare, where the recent prescription drug benefit alone contributed $8 trillion of unfunded obligations. Walker says that our government is spending, borrowing, and undertaxing to a scandalous degree - that we cannot possibly afford the national lifestyle that our elected officials are providing us. Our children and grandchildren will be left with this gigantic bill, one that they cannot pay under any forseeable circumstances. And Walker says that "this is the best kept secret in Washington". Everyone in power understands this, but nobody wants to talk about it, including all the announced presidential candidates. What a crock of shit!

It's kind of humorous that congress would enact the Sarbanes-Oxley legislation to require corporate reporting and control - to prevent another Enron - when the government itself is on a course that will make Enron seem like a triviality. Think of it...we have 300 million citizens in the U.S., and $30 trillion in unfunded liabilities...that's $100,000 in "unfunded" liability for every man, woman, and child in the U.S. And this number does not include the "funded" liability, which is, for example, the part of future Social Security payments that will be covered by future payroll taxes. If our country was a corporation, "bankrupt" would be a kind word for our status.

Walker's prescription for averting disaster is increased taxes, lower government spending, and reductions in our entitlements. That's why politicians don't want to deal with this issue - the solutions will be difficult and unpopular. Moreover, both parties participated in building the bloated government that has got us into this untenable state. "Handshakes all around" occurred when Bush and the democrats agreed on the $8 trillion unfunded prescription drug benefit. They are all guilty.

My very smart partner on the ambulance today predicted that the U.S. will ultimately try to inflate our currency to the degree that these obligations will be met in cheap money. Of course, U.S. interest rates would go sky-high and our credit rating would go down the drain. Retirement funds would provide far less security than people are expecting, since the dollar would buy much less. He suggested it would be foolish for anyone to be in long term bonds at this point in our history, given this huge risk. Hopefully this blog will be preserved long enough for Dick to get due credit for his prediction. You might want to think about this as you make investment decisions - I am.

So, forget about terrorists. The Comptroller General says they are a minor threat compared to what our own government has in store for us. Think about asking your congressperson, senator, or governor about what Walker is saying. What is their plan for coming up with the $30 trillion? If they have no answer, tell your children and grandchildren to pile up hard assets like gold or stock in Chinese companies,or to consider moving to Canada. (If you think I'm bullshitting you, answer why a Canadian dollar is worth $1 U.S today when it was worth $0.55 not so long ago.) All the world knows our economy is tettering over the abyss, but we have no clue because our politicians don't want to deal with it.

Oh! I almost forgot to mention that every dollar Bush is spending on the Iraq debacle is going into the unfunded liability. My grandson Ryder will curse his sorry ass!


Dave said...


That said, what's your take on who to ride with in '08? I'm thinking that a bit of Federalist Papers consent of the governed revolting is in order.

That was my quip. My real comment is that I'm scared.

Woozie said...

See, what you're forgetting is that we're the United States of America. We're invincible! We're bigger than Jesus!