Long term liabilities

From the Atlantic Monthly:

Even if you think government budget numbers are generally not very interesting (and they do tend to blur together into an eye-glazing morass), here's a number to quicken the pulse: $45.5 trillion. That's the size of the long-term gap between the federal government's projected outlays (future spending plus current debt) and its projected revenues. Most government budget projections look only a brief distance into the future—a year, perhaps, or ten at the most. But Jagadeesh Gokhale and Kent Smetters, economists working at the Federal Reserve Bank of Cleveland and the University of Pennsylvania, respectively, have looked further into the future and determined that, in effect, if the U.S. government were a company its owner would have to pay a rational investor $45.5 trillion to take it off his hands. To put this figure in perspective: the entire U.S. economy generated only about $10.4 trillion last year, and total household wealth is currently only about $39 trillion.

This year the national debt is likely to hit $7.5 trillion, or about $25,600 for every American. But each American's share of the government's long-term unfunded liabilities—meaning tomorrow's debt as well as today's—comes to about $156,000. Though no single generation will have to cover the whole $45.5 trillion (and the generations that are already in or very near retirement may not need to cover any of it), ultimately some Americans will have to pay, through dramatically higher taxes or dramatically reduced government services or both.

Those are some outrageous numbers.

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I think a round of All-Day

I think a round of All-Day Strong Aleve is my first priority this afternoon after glancing at those figures.

thats why buying bonds is so

thats why buying bonds is so stupid. its like buying a piece of paper agreeing to tax yourself way more in the future, to pay off your old borrowing at way higher rates than you were led to believe.the more bond issues from states and muni's , the 'broker' they are getting. BTW,the O'Neil guy lost his job for commissioning that report. people don't want to hear or know and the real hit for all of this is going to be made up on the backs of property owners, as they cannot easily escape. like it or hate it, gold is going to eventually become the only escape route.

Even gold is not guaranteed

Even gold is not guaranteed - in the sense that there's always a chance a desperate US government could choose to demonize gold "hoarders", and punish them legislatively.

Perhaps gold bullion in hand could get around most such laws (rather than gold stocks). But IF such laws were passed, there might not be any distinction between someone skirting a silly law to preserve capital, and someone skirting the law because he's a terrorist.

hence the term 'offshore'.

hence the term 'offshore'. doug casey made a great case years ago for holding a good percentage in a stable bank/location for the eventuality. when it gets that desperate, i cannot believe there is anyone in america who would actually hand over thier gold to the government. if you were that dumb, you deserve what you get.

qwest, Americans *did*


Americans *did* physically hand over their gold to the government in 1933.

correction; the ones 'they'

correction; the ones 'they' knew about did. how many just shut up and said 'stick it' to Roosevelt the dictator? i would guess it was in the thousands although there could never be any accurate figure.