Former Reagan OMB Director David Stockman has always been wrong about taxation - he was shrieking for the Gipper to raise taxes to "reduce the deficit" within about thirty seconds of his signing the Economic Recovery Act of 1981, which would have plunged the U.S. economy right back into the Carter recession from which it was only just beginning to emerge, and probably guaranteed that he'd have been a one-term president - but he's not wrong about federal spending and the national debt:
David Stockman, White House budget chief under President Reagan, notes it took the United States 205 years to reach $1 trillion in debt, but only 33 more years to get to the current $18 trillion debt mountain. And he says things are about to get worse.
In Stockman's recollection, the stage for today's fiscal irresponsibility in Washington, D.C. was set in the 1980s, when Congress finagled to show delayed revenue gains from tax increases and a massive payroll tax was buried in a Social Security rescue plan.
"Thereafter, Social security and Medicare entitlement reform was off the table due to the trick of the front-loaded payroll tax increase," he wrote on his Contra Corner blog.
Everybody back then knew the demographics of the ensuing three decades, that the huge Baby Boom generation would actuarily crash the entitlement system once it entered its retirement years and the succeeding, much smaller generations were indentured into supporting it. Had Social Security and Medicare been privatized at the time, it would have been utterly painless compared to the situation that exists today because they weren't. But it's always easier for pols to "kick the can down the road," and always to raise taxes, rather than fixing a politically popular problem.
And now that problem is about to crush us:
Stockman estimated today's federal debt amounts to 106% of GDP, and when state and local debt is factored in, total government debt is 120% of GDP – a load that would put many Americans in a homeless shelter if they owed [their share of it] on an individual basis.
In his view, what makes today's titanic debt burden possible is concerted action by the Federal Reserve and other central banks to create massive credit expansion and the fact the Fed sells Treasurys to other countries.
"That convoy of money printers generated large but dangerous central bank 'vaults' where Uncle Sam's debt has been temporarily sequestered," Stockman noted.
"It was the equivalent of a monetary roach motel: the bonds went in, but they never came out."
The operative term being "temporarily" - because, to borrow a term that environmental extremists love so much, this cosmic level of debt is not sustainable:
In Stockman's view, the massive monetization of the public debt cannot go on much longer or the global monetary system will be destroyed.
He believes the rosy scenario currently projected by the Congressional Budget Office (CBO) for 4% GDP growth in coming years is ridiculously optimistic and "does not have a snowball's chance of materializing over the next decade.
Particularly in the midst of a permanent, artificially-engineered and maintained economic depression.
Rather than $8 trillion of cumulative baseline deficits over the next ten years as projected by CBO, the current policy stalemate in Washington — that has been running for thirty years now....
Corresponding with the communization of the Democrat Party.
....will generate at least $15 trillion of new public debt in the decade ahead."
When that new debt is added to the current $18 trillion hole the nation has dug itself, the mountain of public debt will hit $33 trillion in ten years, he wrote. At that point, Stockman estimates America's public debt will total a whopping 140% of GDP.
I think Mr. Stockman himself is being ludicrously optimistic. Since the U.S. economy is not, in fact, growing at all in real (i.e. non-Fed) terms, his decade debt projection will be more like double GOP or even higher. Begging the question of at what point the whole rotten, inflated bubble collapses in a socioeconomic implosion that will make the Panic of 2008 look like "Happy Days Are Here Again!".
Now y'all know what I think; I believe that Rubicon was passed two years ago, and we're just counting down the uncertain time until the Final Collapse. It is inevitable and inescapable because of who sits in the White House, and his corresponding unlikelihood of voluntarily relinquishing power when constitutionally required. Because he wants that Final Collapse, needs it, craves it, before the country can "fundamentally transform" itself back into a constitutional federal republic from the socialist dictatorship it is today - an eventuality that at last is beginning to look like a serious possibility, as yet another generation has learned - the hard way -the truth about the Democrat Party and the malevolent, despicable, clinically insane ideology it represents.
We really are in a race against an expired clock. But if there is still any time left on it, how do we get passed the big-eared, mom-jeaned sentinel who is guarding it with his panzy-assed equivalent of Mjölnir? On that outcome rests the question of whether there will be future Americans generations to tell the tale, or if it is relegated to some dusty Chinese archeological archive.
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