It Is Now Mathematically Impossible to Pay Off the U.S. National Debt: Federal Government is the Largest Employer, Paying 40% More Than the Private Sector; 60 Percent of the Population Now Gets More in Government Benefits Than It Pays in Taxes

It Is Now Mathematically Impossible to Pay Off the U.S. National Debt

February 8, 2010

The Economic Collapse Blog - A lot of people are very upset about the rapidly increasing U.S. national debt these days, and they are demanding a solution. What they don't realize is that there simply is not a solution under the current U.S. financial system.

It is now mathematically impossible for the U.S. government to pay off the U.S. national debt. You see, the truth is that the U.S. government now owes more dollars than actually exist. If the U.S. government went out today and took every single penny from every single American bank, business and taxpayer, they still would not be able to pay off the national debt. And if they did that, obviously American society would stop functioning because nobody would have any money to buy or sell anything.

And the U.S. government would still be massively in debt.

So why doesn't the U.S. government just fire up the printing presses and print a bunch of money to pay off the debt?

Well, for one very simple reason: That is not the way our system works.

You see, for more dollars to enter the system, the U.S. government has to go into more debt.

The U.S. government does not issue U.S. currency—the Federal Reserve does.

The Federal Reserve is a private bank owned and operated for profit by a very powerful group of elite international bankers.

If you will pull a dollar bill out and take a look at it, you will notice that it says "Federal Reserve Note" at the top. It belongs to the Federal Reserve.

The U.S. government cannot simply go out and create new money whenever it wants under our current system. Instead, it must get it from the Federal Reserve.

So, when the U.S. government needs to borrow more money (which happens a lot these days), it goes over to the Federal Reserve and asks them for some more green pieces of paper called Federal Reserve Notes.

The Federal Reserve swaps these green pieces of paper for pink pieces of paper called U.S. Treasury bonds. The Federal Reserve either sells these U.S. Treasury bonds or they keep the bonds for themselves (which happens a lot these days).

So that is how the U.S. government gets more green pieces of paper called "U.S. dollars" to put into circulation. But by doing so, they get themselves into even more debt which they will owe even more interest on.

So every time the U.S. government does this, the national debt gets even bigger and the interest on that debt gets even bigger.

Are you starting to get the picture?

As you read this, the U.S. national debt is approximately 12 trillion dollars, although it is going up so rapidly that it is really hard to pin down an exact figure ...

So the bottom line is this:

1. If all money owned by all American banks, businesses and individuals was gathered up today and sent to the U.S. government, there would not be enough to pay off the U.S. national debt.


2. The only way to create more money is to go into even more debt which makes the problem even worse.

You see, this is what the whole Federal Reserve System was designed to do. It was designed to slowly drain the massive wealth of the American people and transfer it to the elite international bankers.

It is a game that is designed so that the U.S. government cannot win. As soon as they create more money by borrowing it, the U.S. government owes more than what was created because of interest.

If you owe more money than ever was created you can never pay it back. That means perpetual debt for as long as the system exists.

It is a system designed to force the U.S. government into ever-increasing amounts of debt because there is no escape.

We could solve this problem by shutting down the Federal Reserve and restoring the power to issue U.S. currency to the U.S. Congress (which is what the U.S. Constitution calls for). But the politicians in Washington D.C. are not about to do that.

So unless you are willing to fundamentally change the current system, you might as well quit complaining about the U.S. national debt because it is now mathematically impossible to pay it off ...

The Federal Government is the Nation's Largest Employer (Excerpt)

Career Guide to Industries, 2010-11 Edition

Federal Government Section - According to the Bureau of Labor Statistics, more than 1.8 million civilians work for the Federal Government, excluding the Post Office ...

With about 2.0 million civilian employees, the Federal Government, excluding the Postal Service, is the Nation's largest employer. About 85 percent of Federal employees work outside the Washington, DC metropolitan area.

A substantial number of job openings will arise as many Federal workers are expected to retire over the next decade; competition is high during times of economic uncertainty, however, when workers seek the stability of Federal employment.

Wage and salary employment in the Federal Government is projected to increase by 10 percent over the 2008-18 period.

Federal employees working in the continental United States receive locality pay. The specific amount of locality pay is determined by survey comparisons of private sector wage rates and Federal wage rates in the relevant geographic area. At its highest level, locality pay led to an increase of as much as 34 percent above the base salary in 2009.

In March 2009, the average earnings for full-time Federal employees were $74,403.

60 Percent of the Population Now Gets More in Government Benefits Than It Pays in Taxes

Government relies on a variety of taxes to fund federal spending programs. The principal ones are (1) taxes on personal and corporate income to fund general operations, (2) payroll taxes to fund health and retirement programs, and (3) excise taxes to fund dedicated programs such as highways and public transportation. Each of these taxes impacts families differently depending upon such things as their incomes, spending habits, investments, employment and geography... The bottom 60 percent of American families will as a group receive more in government spending than they pay in taxes... In the case of the highest-income families, they are currently targeted for 43 cents in government spending for every dollar they pay in taxes, even though they disproportionately benefit from public goods such as national defense. - Scott A. Hodge, Accounting for What Families Pay in Taxes and What They Receive in Government Spending, September 21, 2009

February 10, 2010

John Stossel - Government is taking us a long way down the Road to Serfdom. That doesn't just mean that more of us must work for the government. It means that we are changing from independent, self-responsible people into a submissive flock. The welfare state kills the creative spirit.

F.A. Hayek, an Austrian economist living in Britain, wrote "The Road to Serfdom" in 1944 as a warning that central economic planning would extinguish freedom. The book was a hit. Reader's Digest produced a condensed version that sold 5 million copies.

Hayek meant that governments can't plan economies without planning people's lives. After all, an economy is just individuals engaging in exchanges. The scientific-sounding language of President Obama's economic planning hides the fact that people must shelve their own plans in favor of government's single plan.

At the beginning of "The Road to Serfdom" Hayek acknowledges that mere material wealth is not all that's at stake when the government controls our lives:

"The most important change ... is a psychological change, an alteration in the character of the people."

Statism's illogic exposed for all to see in F.A. Hayek's "The Fatal Conceit: The Errors of Socialism"

This shouldn't be controversial. If government relieves us of the responsibility of living by bailing us out, character will atrophy. The welfare state, however good its intentions of creating material equality, can't help but make us dependent. That changes the psychology of society.

According to the Tax Foundation, 60 percent of the population now gets more in government benefits than it pays in taxes. What does it say about a society in which more than half the people live at the expense of the rest? Worse, the dependent class is growing. The 60 percent will soon be 70 percent.

Rep. Paul Ryan of Wisconsin seems to understand the threat:

He's worries that "more people have a stake in the welfare state than in free enterprise. This is a road that Hayek perfectly described as 'the road to serfdom'" ...

Recession Chugs on, Except in Government

February 8, 2010

Examiner Editorial - White House apologists were quick to point to the unemployment rate decline from 10 percent to 9.7 percent as evidence that the recovery is gathering momentum and that President Obama's policies -- especially his $787 billion economic stimulus bill Congress approved last February -- are "working." But the back story behind the figures provides cold comfort.

First, the drop to 9.7 percent unemployment does not reflect the creation of new jobs that normally accompanies an economic recovery. The number of new jobs is actually declining. Total nonfarm payroll employment, for example, dipped by an additional 20,000 positions after a December decline of 150,000 positions.

The unemployment rate the day Obama took office last year stood at 7.6 percent and 134.6 million people had jobs. When he signed the economic stimulus, Obama promised the bill would bolster the economy sufficiently to keep unemployment below 8.0 percent. But the unemployment rate has exceeded 8.0 percent since last fall, and total employment stands at only 129.5 million. The stimulus has been a bust.

Second, anybody who thinks the job situation is going to improve dramatically in coming months is not paying attention to what's going on behind the unemployment rate. The Hudson Institute's Diana Furchtgott-Roth notes that:

“This is a better employment report than last month’s report, yet the economy is still not creating jobs. The percent of the unemployed who are out of work for 27 weeks or more exceeded 41%, an all-time high. This is unacceptable and shows that Congress and the President need to focus on job creation, rather than on expanding government, because the tax increases and borrowing used to expand government reduce overall job creation and create uncertainty."

Furchtgott-Roth further notes that "the labor force participation rate is the lowest since mid-1985." This means that fewer Americans are in the labor force.

Third, among the few sectors of the economy showing net employment growth over the past year is the federal government. The federal civil service is rapidly expanding as Obama increases the size of government, with 33,000 new positions being added in January alone. Only 9,000 of those new slots were for temporary census jobs. In other words, what we are seeing is good times for the public sector and the growing prospect of a continuing and perhaps even deepening recession for everybody else.