Repudiate the National Debt
By Mark Luedtke
Last February, Congress raised the debt ceiling to $14.29 trillion, and the on-record debt will reach that limit sometime in March. Congress must raise the debt ceiling or the federal government will be forced to default on its debt.
But that number is as phony as a $37 dollar bill because government uses corrupt accounting practices that make Enron execs look like altar boys. Forget everything the government and its propagandists told you about the national debt. Boston University economics professor Laurence Kotlikoff, counting all the government’s off-budget items like Social Security, Medicare, Medicaid and perpetual wars for which a private sector accountant would earn him hard time for hiding, calculates the national debt at $202 trillion.
That’s not a typo. Our federal government is $202 trillion in debt and it grows every day. U.S. GDP is just over $14 trillion per year. Our debt problem is worse than Greece’s. We can never pay it off. Government will default. The only questions are when, under what terms and how much we’ll suffer. If we repudiate all federal debt today, the pain will be minimized and the recovery swift. The longer we wait, the greater the pain and the slower the recovery.
Republicans had pledged to cut $100 billion from the budget, a pledge they’re already backing away from, but such minuscule cuts are meaningless. Republicans shouldn’t negotiate symbolic spending cuts in return for raising the debt ceiling. Republicans have no power to make the dramatic cuts necessary to save our country from collapse except by refusing to raise the debt ceiling and forcing government to repudiate the debt. But they won’t do it.
Government’s primary function is to empower the ruling class to loot us. If the government defaulted on its debts, the amount of looting they could accomplish would be greatly reduced, so repudiating the debt is unthinkable to them. It would truly starve the wealth-destroying beast and empower us to rebuild our economy. Neither party wants that for the reasons below.
Government must pay for every dollar it spends either through taxes or printing money. Taxes are collected under threat of violence backed by violence, which is a form of looting. Printing money is counterfeiting, another form of looting. Even borrowed money must be paid back by one of the two forms of looting.
However, looting destroys wealth. If mobsters loot us by threatening violence, we instinctively understand we’re being robbed and the mobsters are destroying our wealth and making our society poorer while enriching themselves. If mobsters counterfeit money and spend it, we instinctively understand they are doing the same through fraud. The same is true when the mobsters call themselves a government. Every dollar government spends is first looted from us then used to redirect resources from productive use to the parasitic political economy, enriching the ruling class, destroying our wealth and making us all poorer. We pay for every dollar government spends twice.
On the other hand, wealth is created by voluntary exchange. If I trade you five apples for two oranges, we both become wealthier because we both have something we want more than what we had before the exchange.
Many claim government creates wealth by providing essential services like law enforcement, a justice system, roads, etc. That’s not true. Every government service is low quality and expensive. Think post office, or worse, the carnage on I-75. Nobody would voluntarily pay for such low-quality services at such high prices because private sector businesses would provide better services at a lower price if government didn’t threaten violence to stop them. These abysmal services are covers to give government looting legitimacy. Since the creation of the income tax and the Federal Reserve, government has looted us to the point of economic collapse.
Most of us have no choice in the matter. Government steals our money and we submit because we don’t want to end up imprisoned like Wesley Snipes. But some people and foreign governments voluntarily assist our government in looting us by loaning it money, enabling it to destroy more wealth. If the government repudiated the debt, its accomplices would suffer and refuse to loan it more money. As a result, resources that would have been lost to the political economy would instead produce wealth in the productive economy, turning our economy around.
Seeing that turnaround, scales would fall from the eyes of the majority of Americans, who would then further reduce the size and scope of government to further improve their own lives and our economy. The result would be transformative as the American people took back their wealth and power from the looting class. Empowered Americans would transform the U.S. from a bullying, crumbling husk of a superpower drowning in debt to the fastest growing economy in the world. If government repudiated the debt, forget about the century of China. Operating under a dramatically reduced burden of government, the American people would quickly return America to a trajectory of greatness that would not be surpassed in this century.
But the ruling class parties will work together to prolong the looting. Pharaoh Obama will call it bipartisanship and they’ll celebrate like it’s a good thing.
Mark Luedtke is an electrical engineer with a degree from the University of Cincinnati and currently works for a Dayton attorney. He can be reached at firstname.lastname@example.org