I am posting the below article “as is”. It appears to detail many of the issues that we are working on with regards to empowring middle class America about its financial future. Here it is:
Another American Tragedy is in the making. A much bigger Ponzi scheme that will shock every person in America is still operating. It is being conducted by the U.S. government and your elected politician leaders. It is called our National Budget. With most of our spending on automatic pilot, the aging of the baby boom generation will put tremendous strain on our economic system in the coming years. As you can see, Medicare costs will explode over the next 40 years. The increasing debt will result in interest payments on the debt becoming the largest expenditure in the federal budget. The longer we wait to address this unavoidable train wreck, the more likely it will result in generational war between the baby boomers and younger generations. Mandatory spending for agriculture subsidies, unemployment benefits, civilian and military pensions and health benefits continues to grow. The ponzi aspect of this system is that we continue to pay out benefits by printing money. We are obligated to pay $53 trillion that we do not have. Social Security has run at a surplus since its inception. The money is not in some lockbox. Your trustworthy leaders have spent all of the surpluses ever generated by Social Security to keep the ponzi scheme going.
The following chart proves beyond a shadow of a doubt that we cannot use the Republican Big Lie of growing our way out of this problem. As entitlements and net interest grow, discretionary spending gets squeezed. Non-defense programs, which include, activities related to children, transportation infrastructure, education, training and research that should promote future economic growth and prosperity, are crowded out. We are forced to pay no heed to investments in the future in order to honor commitments made decades ago. The short term focus of Washington politicians has ruined our fiscal future. Children don’t vote, and younger people are less involved in the political process. As a result, the political gain from immediate increases in spending or reductions in taxes outweighs the eventual economic benefits of more politically costly but fiscally responsible choices. This is a criminal and immoral act upon our future generations. President-elect Obama is about to embark on the largest unfunded expenditure program in the history of our country. This will move us closer to the point of no return where the ponzi scheme implodes.
The Government Accountability Office provided a troubling deficit forecast in January 2008 which showed we would reach a fiscal deficit of $1 trillion in 2016. Democrats and Republicans have proven that when they truly work together they can accomplish anything. The $1 trillion deficit will be reached 7 years early, in 2009. Adding enormous new spending programs is like being trapped in a deep hole and deciding to dig deeper. Something called shared sacrifice for the benefit of future generations is essential to avoid another American Tragedy. Shared sacrifice is something that hasn’t been asked of U.S. citizens since World War II. They are known as the Greatest Generation. Now is time for the Next Great Generation.
Bernie Madoff’s ponzi scheme came crashing down when investors requested their money back and no one was willing to give him the funds to pay them off. The American ponzi scheme will come crashing down when our foreign creditors decide to no longer fund our foolish ventures. Foreigners own more than 50% of our existing government debt and have been buying 70% of our new issuances. The Treasury bills and bonds are paying less than 2.5%. Our unfunded liability of $53 trillion increases by $3 trillion per year. Our National Debt exceeds $10.6 trillion. In 2009 and 2010 we will run annual deficits in excess of $1 trillion. The Federal Reserve is printing dollars as fast as humanly possible. Every dollar printed makes the previous dollars less valuable. As our currency is debased, it will eventually collapse. Foreigners will refuse to pour more money down this rat hole. The biggest ponzi scheme in the history of the world will be over.
Friends ask me why I’m such a pessimist. These questions made me consider what I thought would happen over the last few years. I thought that the housing market would decline 10% to 20%. It has declined 30% to 50%. I thought the stock market could decline 30%. It has declined 40% to 50%. I thought our deficits due to wars could reach $500 billion. The deficits will easily exceed $1 trillion. I thought gold might reach $600 an ounce. It reached $1,000 an ounce and is poised to go much higher. All of my pessimistic projections have been surpassed to the downside. Examining Alexander Tyler’s stages of democracy, I am optimistic we can avoid the final stage of Dependence back into Bondage. It seems inconceivable to me that our country could fall under the rule of a dictator. But in the midst of a total economic collapse, I guess anything is possible. Let’s hope my worst fears are not realized. If enough Americans seek the truth, the Big Lies can be exposed before it is too late. Truth is the mortal enemy of the lie.