Mandeville, LA – Exclusive Transcript – Before Obamacare, there was $222 trillion worth of unfunded liabilities on the books for the federal leviathan. The money does not exist on the face of the planet to discharge those responsibilities. That, by the bye, is in excess of what is actually funded and paid for, yet no one is talking about that. Check out today’s transcript for the rest…
Begin Mike Church Show Transcript
Mike: I’ve spent a lot of time talking about the government shutdown but not talking about the partisan bickering and the naked partisanship that is at play here, and also asking the question of what seriously is going to be the end result of all this. If you want to shut the government down because legislative acts have gone out of control, it’s not just Obamacare that’s out of control. The Affordable Care Act is the tip of the proverbial iceberg. Before Obamacare, there was $222 trillion worth of unfunded liabilities on the books for the federal leviathan. The money does not exist on the face of the planet to discharge those responsibilities. That, by the bye, is in excess of what is actually funded and paid for, yet no one is talking about that. You can’t find that discussion with the proverbial search warrant and one of those fancy schmancy high-beam, powerful halogen lights you see in all the creepy movies where people have to go into caverns and whatnot to go track down what it is they’re looking for. Keep that in perspective.
RealClearPolicy.com, this is a blog post from 1 December 2012. I asked the question earlier about military spending and about how 800,000 civilian employees of the Department of Defense, that that number has to be incorrect. That does not include military personnel. Why isn’t that being discussed in the hallowed halls of Congress? It’s because decepticons don’t want to deal with that. The military industrial complex is a sacred cow to some. Really, one that big and large is sacred? Listen to this. If you want to talk about real problems, here’s a real problem to discuss, “Economist Laurence Kotlikoff: U.S. $222 Trillion in Debt.”
On Tuesday, the Republicans Chris Cox and Bill Archer argued in the Wall Street Journal that a more accurate accounting of the government’s liabilities would show that the national debt was closer to $87 trillion than to the stated $16 trillion.
Some commentators, including the Atlantic‘s Derek Thompson, took issue with Cox and Archer’s analysis, arguing that the only way to assess debt is the way it’s currently done — by summing up the number of government bonds outstanding.
I asked Boston University economist Laurence Kotlikoff, an expert on the national debt, to weigh in on the conversation.
RealClearPolicy: Cox and Archer argue that the U.S.’s underlying debt is much higher than the officially stated debt of $16 trillion. They argue that if you add up the unfunded obligations the government has — to Social Security, Medicare, federal workers’ pensions, and so on — the real debt is about $87 trillion. Can that be right?
Kotlikoff: That’s wrong. It’s $222 trillion.
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That’s what we economists call the fiscal gap. I don’t know what those guys are looking at, but we economists do it a certain way. We’re not politicians. We’re just doing it the way our theory says to do it. What you have to do is look at the present value of all the expenditures now through the end of time. All projected expenditures, including servicing the official debt. And you subtract all the projected taxes. The present value of the difference is $222 trillion.
So the true size of our fiscal problem is $222 trillion, not $87 trillion. That’s comprehensive and incorporates the official debt. The official debt in the hands of the public is $11 trillion, so the true problem is 20 times bigger than the official debt.
RealClearPolicy: Why is it more useful to think about the fiscal gap than the official debt?
Kotlikoff: The official debt is something that has to be repaid, and the government is committed to principal and interest payments. But the government has other commitments, like Social Security payments, health care and Medicare payments, Medicaid payments, and defense expenditures. And it also has negative commitments, namely taxes. So you want to put everything on even footing. Most of the liabilities the government has incurred in the postwar period have been kept off the books because of the way we’ve labeled our receipts and payments. The government has gone out of its way to run up a Ponzi scheme and keep evidence of that off the books by using language to make it appear that we have a small debt.
Mike: When he says “the government,” what does he mean by the government? He obviously means members of Congress, the Congressional Budget Office, the White House’s Office of Management and Budget, etc., etc. He’s talking about the federal leviathan. When I tell you that they’re all in on it, they are all in on it. Who is it that is concealing the real nature of the problem? We’re wringing hands and talking about what we’re going to do about Obamacare, about adding tens of millions of new liabilities in the form of uninsured people who now partake of the free health insurance they’re now going to get through these exchanges? So the number is not even $222 trillion anymore; it’s higher than that and it’s going to continue to increase.
Mike Church Show Transcript – Nearly A Half-Million Employees Left At Department Of Defense, And That’s With Half Furloughed
Call me a fool or old-fashioned, but I wonder: At what point in time will the American sheeple push themselves away from the DVR console, put the video game joystick down, stop watching college football on Saturdays and roll their sleeves up and get to the business of saying enough is enough; we’re going to have to address this and fix it? Otherwise, why are we even having all these other conversations? These other conversations about the shutdown and the current debt ceiling and all that, these are all ancillary to what has already been committed. Don’t you understand, folks? These liabilities have already been committed. They are already part of current law. They are on the books. How can any sane individual, how can any country that is allegedly responsible and leader of the free world continue what is obviously and patently a corrupt sham? When you tell me [mocking] “our kids are gonna get in there. We’re gonna elect Rand Paul in 2016. Our kids are gonna get in there and we’re gonna have a hot dog roast. You wait till our kids get in there. They’re gonna fix this,” I have to respond to you: [blows raspberry] really? $222 trillion, your kids ran this up. We’re not talking about football sporting analogies here. This is real money that is going to affect real people’s lives.
This is the kind of thing that sinks an empire and drags an empire down so it’s not going to be an empire anymore. You people that think you’re going to rule the world with your military for the rest of time immemorial, how do you propose to pay for it if you’ve got $222 trillion out there on the credit card that has to be repaid? Again, we are staring square in the eye at the evil that is us, and the undeniable truth that this is not going to be repaid. We’re not going to pay the $222 trillion back, we’re not. Those of you that are experiencing furloughs, get used to it, because a permanent furlough is coming your way sometime in the very near future. It has to. This is the logical consequence of this. All the people wringing their hands and gnashing their teeth [mocking] “The government has shut down. What are we gonna do? The parks aren’t open,” you just wait. You know what? We’re going to have a fire sale and sell those national parks to the highest bidder. If James Cameron wants to buy Yosemite, sell it to him.
There are real issues and real problems that cannot be fixed by watching Fox News, cannot be fixed by going to certain radio personalities’ websites, including mine. They can only be fixed by bold leadership and bold solutions in the political realm. Some of us believe that the real bold solution to this is to dissolve the entity and wipe the slate. The commitments are not going to be met, ladies and gentlemen. It is a fiscal impossibility. Even if you said we’re going to roll our sleeves up and pay it back, to be taxed in order to pay that would require a suffocating tax that would strip all incentive from productive labor. That’s the fact of the matter here. That’s the real state of affairs here. It doesn’t have anything to do with Obamacare and [mocking] “We can’t have socialized medicine.” You already have it. That’s the other thing I have to laugh about. [mocking] “We’re not gonna sit here and allow socialized medicine.” Really? Of course, you’ll never get the people that are defending Medicare today to call it socialized medicine, but that’s that it is.
End Mike Church Show Transcript