I have made this economic point before, but it appears to me that I need to keep making it. This is because we live in a time when we will all need to be reminded, regularly and at periodic intervals, that red ink does not really exist. Related catastrophes do, but I should explain myself.
We are in the same position as two drunk guys who were out on the town, and on a friendly bender. Because one of them was sloshing full of the milk of human kindness, he promised the other guy that he would write him a check on the morrow for a million dollars, or perhaps two million. He promised this, not because he had the money, or because the money existed in any fashion, but because he was drunk, friendly, and magnanimous. The other guy believed him for the same drunk reason, and adjusted all his mental plans for his financial future accordingly.
The federal obligations to the unfunded big ticket entitlements like Medicare and Social Security (that nobody appears to want to deal with honestly) add up to something between 80 and 100 trillion. This does not include other related sinkholes — like the state pension plans, for example. For purposes of comparison, the total net worth of the entire U.S. is around 70 trillion.
These entitlements are in a different category altogether than the annual bundle of lies called the federal budget. The annual deficit is a shooting star that lights up the night sky, making you almost want to say, “Isn’t that cute?” The entitlements are an asteroid the size of Rhode Island that’s going to land on New York.
The entitlements embody a staggering amount of unkeepable promises. And the reality is that unkeepable promises won’t be kept. Let us go over this principle again. That which cannot be done won’t be done, that which cannot happen won’t happen, that which is not sustainable will not be sustained, and that which cannot go on will not go on. You get the drift.
Ron Paul has many good idea when it comes to annual budgetary spending, but even he does not have a plan for the entitlements. He wants to have an “adult conversation” about them, but you cannot have an adult conversation with an asteroid the size of Rhode Island. The only adult conversation I can envision just now is, “Fire on the mountain, run, boys, run.”
But in this diminishing sea of candidates, who cannot or will not say what must be said, we are indeed fortunate in the arrival a dark horse candidate. Like many horses, including the dark ones, he has an odd name. Basic Math is the dark horse candidate who is going to successfully bring in a true austerity program. And unlike all the other candidates, he doesn’t even need to get elected to do his thing.
So we do not have to worry about the consequences of paying out all those entitlements. It is not going to happen. The money doesn’t exist, and there is no conceivable way that amount of money is going to come into existence. Life will go hard for some when this realization sets in. The only question is “who will that “some” be?” The odds are that these people will be, to return to my first metaphor, those who stayed drunk the longest.