Government debt has grown so large that it is now mathematically impossible for the government to pay it back.
Sports fans are familiar with the calculations in which your team is “mathematically-eliminated” from any possibility of making the playoffs (something Chicago Cubs fans typically process in early summer, but… maybe it’ll take a little longer in 2015?).
So how should one react when it becomes mathematically impossible for your entire nation to repay its debts?
There was an article this week saying around 20% of Americans state they will not pay off their personal obligations before they die (quite a moral proclamation!). Now Simon Black believes it’s time to realize the United States as a whole will never make good on its gargantuan debt, and some form of default is coming.
He writes in the Sovereign Man blog:
Over the subsequent decades there was a sustained push to finally establish the country’s central bank that will control money and credit, as well as institute a permanent income tax to feed the expanding aspirations of government.
They succeeded in 1913 when the Federal Reserve Act was passed and the 16th Amendment ratified, binding the country in the shackles of central banking and taxation of income.
Over the century that followed, the US has gone from being the biggest creditor in the world to its biggest debtor.
Decades of expanding government programs, waste, endless and costly wars, etc. have racked up such an enormous pile of debt that it has become almost impossible to pay it down.
A lot of folks don’t realize that, since the end of World War II, the US government’s total tax revenue has been almost constant at roughly 17% of GDP.
In other words, even though the actual tax rates themselves rise and fall, the government’s ‘slice’ of the economic pie is almost always the same—17%.
I’ve worked out a mathematical model which shows that, even with absurd assumptions (7%+ GDP growth for years at a time, low interest rates, etc.), it is simply not feasible for the US government to ‘grow’ its way out.
Default has become the only option.
Socialist ideology has its consequences. When the People give up all pretense of paying for their own needs and desires, and seek Daddy State to make up the difference, you must confess you live in a nation of thieves.
America, America, how far you have fallen.