by Brandon Smith
In the previous installments of this series, we discussed the hidden and often unspoken crisis brewing within the employment market, as well as in personal debt. The primary consequence being a collapse in overall consumer demand, something which we are at this very moment witnessing in the macro-picture of the fiscal situation around the world. Lack of real production and lack of sustainable employment options result in a lack of savings, an over-dependency on debt and welfare, the destruction of grass-roots entrepreneurship, a conflated and disingenuous representation of gross domestic product, and ultimately an economic system devoid of structural integrity — a hollow shell of a system, vulnerable to even the slightest shocks.
This lack of structural integrity and stability is hidden from the general public quite deliberately by way of central bank money creation that enables government debt spending, which is counted toward GDP despite the fact that it is NOT true production (debt creation is a negation of true production and historically results in a degradation of the overall economy as well as monetary buying power, rather than progress). Government debt spending also disguises the real state of poverty within a system through welfare and entitlements. The U.S. poverty level is at record highs, hitting previous records set 50 years ago during Lyndon Johnson’s administration. The record-breaking rise in poverty has also occurred despite 50 years of the so called “war on poverty,” a shift toward American socialism that was a continuation of the policies launched by Franklin D. Roosevelt’s ‘New Deal’.
The shift toward a welfare state is the exact reason why, despite record poverty and a 23 percent true unemployment rate (as discussed here ), we do not yet see the kind of soup lines and rampant indigence witnessed during the Great Depression. Today, EBT cards and other welfare programs hide modern soup lines in plain sight. It should be noted that the record 20 percent of U.S. households now on food stamps are still technically contributing to GDP. That’s because government statistics make no distinction between normal grocery consumption and consumption created artificially through debt-generated welfare.
This third installment of our economic series will be the most difficult. We will examine the issue of government debt, including how true debt is disguised from the public and how this debt is a warning of a coming implosion in our overall structure. National debt is perhaps one of the most manipulated fields of economics, and the layers surrounding what our country truly owes to foreign creditors and central banks are many. I believe this confusing array of disinformation is designed to discourage average Americans from pursuing the facts. Here are the facts all the same, for those who have the patience…
First, it is important to debunk the mainstream lies surrounding what constitutes national debt.
“Official” national debt as of 2015 is currently reported at more than $18 trillion. That means that under Barack Obama and with the aid of the private Federal Reserve, U.S. debt has nearly doubled since 2008 — quite an accomplishment in only seven years’ time. But this is not the whole picture.
Official GDP numbers published for mainstream consumption do NOT include annual liabilities generated by programs such as Social Security and Medicare. These liabilities are veiled through the efforts of the Congressional Budget Office (CBO), which reports on what it calls “debts” rather than on the true fiscal gap. Through the efforts of economists like Laurence Kotlikoff of Boston University, Alan J. Auerbach and Jagadeesh Gokhale, understanding of the fiscal gap (the difference between our government’s projected financial obligations and the present value of all projected future tax and other receipts) is slowly growing within more mainstream circles.
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Peter Janisch specializes in short sales in Short Sale Realtor. I am your Short Sale Realtor Short Sale Specialist Realtor and Short Sale Realtor loan modification and distressed property expert. This article and content is for general informational purposes and may not be accurate. This should not be taken as legal advice, technical or tax advice under any circumstance. Seek legal advise and representation in all legal matters.