by Richard L. Spencer, Ph.D.
The Legacy of Unfunded Liabilities
As the premise for this short analysis of unfunded liabilities, I shall use the figures put forth by President Fisher of the Dallas Federal Reserve in a recent interview at the Wall Street Journal. His office has estimated the present value of the unfunded liabilities for Medicare and Social Security alone to be in excess of $99 trillion or about seven times our current GDP. Fisher lamented that our political leaders have “dug a very deep hole” for the country.
Most economists agree and believe that we are positioned at a crossroad concerning our country‟s financial future, as there is no reasonable expectation that we can tax, grow, or borrow our way out of such a crushing, unfunded debt. It is a lethal picture of delusion and idealism that knows no boundaries and recognizes no financial realities. Hauser‟s Law states that federal tax receipts always fall short of 20% of GDP. That alone makes any suggestion these programs can be fiscally supported divorced from the totality of fiscal prudence. The U.S. has entered into a Faustian model of debt, dependency, and default. It is Ponzi on steroids and the country is the victim!
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