Probably the best definition of the word “Faith,” can be found in the Bible at Hebrews 11:1 in a modern English translation: “Faith is the assured expectation of things hoped for, the evident demonstration of realties though not beheld.” More succinctly, faith is a strong belief in something, even though it could or couldn’t happen. You have faith the sun will rise, your religious beliefs are correct, your car will start, your mate will be true to you, your bank will not go broke, and faith your body and mind will remain healthy.
Probably 90% of Americans have faith in the U.S. dollar, because it is backed by, “The full faith and Credit of the United States Government.” Isn’t that enough? It must be, for probably 90% of Americans have faith in the dollar, or they wouldn’t have savings accounts, stocks, bonds, and IRA’s, denominated in dollars.
From the March 28th issue of the CATO blog, the headline reads: “The $88 Trillion Unfunded Entitlement Obligation Washington Keeps Ignoring.”
The first paragraph reads, and this backs up last week’s column about welfare, and what situation it has gotten us into: “Social Security and Medicare account for more than the government’s entire $79.6 trillion long-term funding gap. Treasury estimates that total social insurance obligations exceed dedicated funding by about $88.4 trillion, almost all of which is attributed to Social Security and Medicare. A small share of about $0.1 trillion comes from the Railroad Retirement and Black Lung programs.” Gives you faith in politics?
For the rest of this, I will grab sentences and use quotes from this five page piece. “Social Security is primarily financed through payroll taxes on current workers, with benefits paid out to current retirees, while Medicare relies on a mix of payroll taxes (for hospital insurance), general revenues, and beneficiary premiums.”
“The U.S. fiscal trajectory is rapidly worsening. Federal debt is already equal to the size of the economy and continues to grow.” Does this give you faith in the U.S. dollar?
“The overwhelming takeaway: There is no realistic path to fiscal solvency that avoids reducing spending on the major entitlement programs. Suggesting otherwise is delusional. Delaying these changes will only force abrupt and disruptive adjustments later.” Notice that the word ‘welfare’ sounds far too gruff, so it has been substituted with ‘entitlements.’ Maybe a name change will give faith?
“Entitlements,” doesn’t mean you get dollars because someone is deformed, stupid, have crossed eyes, or has a serious physical problem. It means someone is ‘entitled,’ because some politician got a law passed which said “you need it,” and he’s going to vote for it, so you’ll vote for him or her. Both parties have done this over the last 93 years, but most of the votes for ‘entitlements,’ were Democratic. Which party gives you faith in them?
We cannot pay our bills with money we print, because we would go to jail, so we keep our spending, hopefully, in line with our incomes. Government pays its bills with un-backed paper money and computer entries. Government, unlike us, spends gleefully, with no restraints, and it is literally impossible to stop, it has become so addictive for hundreds of millions of Americans.
“Federal debt is already near 100% of GDP. Under current policy, it continues to rise faster than economic growth. Higher inflation becomes the path of least resistance the longer legislators procrastinate on making the economically necessary changes that are politically difficult. The report makes clear that rising debt is not a temporary problem. It is the result of unsustainable policy choices. Chief among them: bestowing lavish benefits on older Americans, financed by borrowing that shifts the cost to younger generations.” Still have faith in the buck?
Welfare or ‘entitlements’ are extremely addictive. My Dad started smoking addictive “Camels” as a teen, and he quit at age 63 when lung cancer killed him. I like to have a cup of coffee in the morning, but it is a habit, not an addiction. I get Social Security and could live without It, but millions can’t, and their lives are dependent on receiving it. Hundreds of millions of Social Security recipients, if it were denied, would face a serious economic situation, and the same with Medicare. Addictions must be virtually impossible to eradicate, although millions have quit smoking. Good for you, but addictions on things which keep you alive, such as Social Security and Medicaid, cannot be disregarded or glossed over by governments or politicians.
“Treasury estimates that social insurance obligations exceed funding by $27.9 trillion for Social Security and $60.4 trillion for Medicare.”
93 years of welfare, have become so slowly weakening and addictive, that most today, gloss over it and give it no thought. Millions of lives may become weak and impossible to continue, without addictive Social Security and Medicaid welfare programs, and no government or political party would risk ceasing or even trimming them. CATO, I am sure realizes the impossibility of legislating cuts or even gradual cuts to addicted, welfare weakened, Americans. No U.S. politician or government, would defrock welfare, as the violence and bloodshed would destroy America, even though that will eventually happen, hopefully after our deaths, because it will be horrifying and impossible to stop. I know of no way to stop inflation, and its ultimate result.
Since it can’t be stopped, wouldn’t it be sensible to insure against it, with gold and silver, whose dollar prices rise, as the dollar collapses, with no payments? The 93 years of inflation have happened so slowly, that 90% of America thinks the buck is OK. You decide!
-Don Stott. don@coloradogold.com