|The Gross National Debt|
Editorial by Ivan Beliveau - 15 December 2011: For many residents in town, there will be very nice retirements. Some of these retirements will be generous; other retirements will be very generous. The possibility of pensions at age 45 exists for public safety employees. These pensions might be equal to 100% of base pay if the public employee chose to “spike” the final three years of work with excess “detail” pay. The possibility even exists for “double-dipping” or having two generous public pensions! There is actually a whole spectrum of public employee pensions that are much different from the private sector.
In the first place, the possibility of any type of pension doesn’t really exist in the private sector; pensions are a thing of the past for the most part. What might exist is a 401K-type plan that requires a private employee’s contribution and earns no interest. There is a bigger issue, however.
The private employee might never be able to retire! Never mind that the private sector employee might never be able to enjoy a personal retirement. The private sector employee will also pay for the cost of all these public sector pensions and benefits even if they have lost a job, are on fixed-income, are “underwater” in their mortgage, have had a pay cut or a similar circumstance.
In addition to all these very unfortunate financial circumstances highlighted above, the private sector employee also needs to be made totally aware of what is “coming down the road.”
What is “coming down the road” is a massive bill for all the promises that have been made to people by the federal/state/local politicians. It is “time to pay the fiddler.”
Without discussing the merits of Social Security, Medicare, Medicaid, Pentagon, and the federal deficit, it needs to be pointed out that there will be a massive bill coming due in the order of at least $100 trillion dollars to pay for these costs which are funded by a “pay as you go” system. Families who pay no taxes at all will not pay these debts. About 79 million non-retired & above poverty line families and their children will pay these debts of about $785,000 per household. Most retired and below poverty line families are not in a financial position to pay these, or any other, taxes. These taxes will be paid directly from earned income or indirectly through the process of inflation.
It is one thing to see these taxes coming directly out of a person’s paycheck. It is entirely different when the taxes are paid for covertly through a “stealth” inflation tax (rising food and fuel prices) or a covert “birth tax” (the debt left for future generations to pay.)
The “stealth” food and fuel price inflation tax will be tough on most (99%) people who hope to retire some day, pay the local taxes, deal with a pay cut, protect a threatened job, survive a large mortgage payment or pay for a house that is “underwater.”
The covert “birth tax” on future generations will make it next to impossible for them to pay off the student loans, get a good job, start a business or buy a house. Who has it worse, adults or children?
It will be very smart thing to do if everyone starts to learn the causes and prevention of excessive debt. What if people have been deceived?
Most economists today point out that it is the government’s job to run big debts in bad times. These economists also neglect to say that the same economic theory requires that the governments need to run surpluses in good time to pay for the bad times. Oops! Sorry about that oversight.
Most politicians and economists may have one thing in mind - their own well being. Watch out!