Unfunded liability – a bill or IOU that cannot be paid; a debt for which there is no money
Federal DEFICIT – the ANNUAL shortfall, the total (which is often just called the 'deficit') of spending, plus interest payments on the debt, minus tax revenues
National DEBT – the sum of all the deficits owed to the public PLUS what's owed to seniors, veterans and retired employees.
The "official" debt of the United States is only around $14.5 trillion dollars as of June 6, 2011. This is a manageable number; we could pay it off in a few decades if we quit buying luxuries like food and clothing, and take a few other minor economy measures. Unfortunately, the "$14.5 trillion" number was produced by government accounting, which among other things allows one to ignore Social Security, Medicare, Obamacare, and government employee pensions. ‘The government has promised pension and health benefits worth more than $700,000 per retired civil servant. The pension fund's key asset: federal IOUs’ [1]. USATODAY reported on Monday that the total ‘unfunded liability’ of the federal government is now $61.6 TRILLION, OR ROUGHLY $527,000 PER HOUSEHOLD!
HOW DO WE GET OUT OF THIS MESS?
We won’t. Most likely, the US will simply continue into bankruptcy. This is the most common pathway for nations with fiat currencies and unchecked ruling classes. But let's assume that somehow a Clone Army of 435 Rand Paul’s or Paul Ryan’s get into Congress, and genetic technology brings back Jefferson. Can the US be made solvent again?
Maybe. Most of the unfunded liability is medical. We know why the medical system does not work. So if we eliminate the FDA, guild restrictions on medical professions, and the ridiculous tax laws that force us into medical-insurance serfdom to employers, we could cut medical costs enough to phase out Medicare and the new "drug benefit." In this way more than half the shadow debt can be wiped out.
The answer for the Social-Security ponzi scheme is well known. Chile fixed its Social Security disaster decades ago, by giving large IRA-style allowances and phasing out the government payments to younger recipients. The sooner we do this the easier it will be… the Boomers have started retiring.
And finally, we have to listen to the Founder's calls for free trade with all nations but entangling alliances with none. The US cannot stop every quarrel in the world even if we wished… and the actual record of our foreign-policy geniuses has been to send a couple of trillion dollars out to the very worst criminals in human history. Aid To Dependent Dictators must stop.
And I have not even TOUCHED on how much illegal immigrants are costing the government.
Would you give a child more money to get him to spend LESS at the toy store? The first step in climbing out of bankruptcy is to cut up Uncle Sam’s credit card – NOT TO RAISE THE SPENDING LIMIT.
[1] http://www.usatoday.com/news/washington/2011-06-06-us-owes-62-trillion-in-debt_n.htm
