Chairman of Joint Chiefs of Staff Says National Debt Biggest Threat to National Security

With thanks to Zero Hedge

http://www.zerohedge.com/article/chairman-joint-chiefs-staff-says-national-debt-biggest-threat-national-security

And that is exactly the reason we are about to be plunged into a war of global proportions.

To be clear, the past 100 years of monetary policy instigated and abetted by a select group banks is a deliberate mechanism predicated on the constant expansion of debt. As this policy inherently conforms to the law of diminishing returns there is a mathematical point past which more debt no longer can produce enough nominal revenue to service the debt. Ergo; we are technically bankrupt. That is, we can create more money but the traditional mechanism that is supposed to inject this new money in the economy is broken and no longer generates the economic activity required to feed state tax revenue thus by extension Federal revenue declines too.

Initial inevitable response is the following (again, with great thanks to Zero Hedge):

http://www.zerohedge.com/article/us-government-matches-every-dollar-tax-revenue-dollar-new-debt

Excerpt:

  • Total net debt issued since September 2008: $3,351 billion (from $10.025TR to $13.376TR)
  • Gross tax receipts since September 2008: $3,185 billion. Note this is not net of refunds. Should one exclude the $660 billion in refunds issued over the same period, the net contribution by taxpayers is just over $2.5 trillion, meaning that the value of each dollar of debt issued is a quarter greater than each dollar in taxpayer revenues.
  • This number would be somewhat offset by Corporate tax revenues, which over the same period amount to $440 billion gross and $230 billion net of corporate tax refunds.

Our governments are trapped. The choices are few and well defined and other than a war of aggression, all other choices are politically unpalatable at home in the ostensibly “civilized” West.

In accounting terms, what needs to occur is an immediate reduction of government expenditure and an immediate and drastic reduction in new debt issuance. Particularly in the USA, military expenditure must be drastically cut. Remember here that the USA’s military budget is larger than the military budgets of all developed nations combined. But cutting military budgets alone won’t do the trick particularly in Europe. Furthermore, since governments in the West have liberally helped themselves from social security funds that were ostensibly set aside for society (when governments borrow from social security these sums do not show in national debt statistics) this means that a very large chunk of social expenditure too needs to be curtailed. But as evidenced by Greece and soon by other Western civilized and developed countries, society does not take well to having their handouts taken away particularly when, in the particular case of pension contributions, these funds were supposed to have been set aside.

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