People (politicians) say “the government is going to go bankrupt if we don’t do something soon!” Even Paul Ryan, vice-presidential candidate, at the Republican National Convention on Wednesday night (8/29/2012) said “We don’t have much time.”
But here’s what’s really going on.
The government reports that it ran a deficit of $1.3 trillion in 2011 and $1.1 trillion in 2012. This week the total national debt as reported by the government just crossed the $16 trillion mark. Just 286 days before, it reached $15 trillion.
But these numbers are deceiving — and extremely under-reported.
THE ACTUAL NUMBERS AND THE BIG PICTURE
The truth is that the total debt is $222 trillion. The deficit actually grew by $11 trillion last year — 10 times the official number — and $9 trillion the year before that. But this is not new. Economist Laurence Kotlikoff puts out these reports every year. They are simply ignored.
$222 trillion = the inevitability of government default. This is how much money the Federal Government must set aside today to pay for the next 75 years worth of “social safety-net” promises. And it grows every year.
It grew by $11 trillion last year. That means social security and medicare liabilities, among other things, are growing at about 5% per year.
In practial terms, this means the government must invest $222 trillion today and generate a 5% return to actually be able to afford to make good on the promises it has made: Social Security and Medicare.
For comparison, the annual global economy is estimated to be approximately $62 trillion.
Every welfare state in the West has the same problem. Default is inevitable. There is not enough productivity in the world to pay for all of the promises our politicians have been making for us for 80 years or more. There will be no salvation or deliverance by messianic government — except deliverance into ruin for those who continue to have faith in government.
I AGREE — SO WHAT DO I DO?
If these numbers and the reality and inevitability of government default make sense to you, your next question is probably “OK — but what do I do about it?” You must get educated. You can take one simple step that most will be reluctant to take. Let’s look first to the Bible:
A river flowed out of Eden to water the garden, and there it divided and became four rivers. The name of the first is the Pishon. It is the one that flowed around the whole land of Havilah, where there is gold. And the gold of that land is good (Genesis 2:10-12 ESV)
Gold and silver have been used for money for thousands of years. It’s not coincidence people like gold; God imputed value to it, and as His image we like the things He likes. It is man’s own doing to force the myth upon society that gold is a “barbarous relic.” We’ll see how false that idea really is over the coming years.
God likes honest weights and measures. (Leviticus 19:35-36) Replacing gold money with fiat money (such as our Federal Reserve Notes) makes it easy to steal from others using dishonest weights and measures.
Buying gold means that you are voting against the solvency of the government. It means taking your future out of the hands of politicians and into your own hands. It means that you are taking active steps to protect yourself from long-term government theft by inflation. It means you are serious about leaving an inheritance for your children. But before you buy, you need to completely understand why you are buying, what circumstances you are anticipating, and therefore what to buy. Start with Gary North’s free book, The Gold Wars.
Recognize what default at the national level means: a return of power to local governments. When the federal money stops flowing down, the local city and county governments will have to pick up the slack. Build a network now. Get more involved with your church. Build your support network now so that it will be in place when others are caught unprepared — you can reach out to them and share the Gospel. Take the first small action, then take another. Download this book. Then read it.