Saturday, March 30, 2013

The Local & State Debt Bomb

It is now estimated that local and state governments have obligated their taxpayers to pay out $7.3 Trillion dollars in various pension and medical benefits for local and state employees.   The money is not there to pay it because only a fraction of this amount has been put aside to pay out these benefits.   So now in addition to our $17 Trillion National Debt and the $100 Trillion dollars of unfunded liability sitting out their needed to deal with Social Security, Medicare, Medicaid, ObamaCare and federal pensions and medical benefits,  we have the Local and State Debt Bomb in our future. 

The reality is that if all the wealth and assets held by every American were confiscated tomorrow, there would not be enough money to pay all these IOU's.   It is not going to happen.   What will happen is that government will default on these obligations in the largest Ponzi Scheme in human history.   Trillions of dollars of these benefits will never be paid because the money is just not there to honor these obligations.   It is already happening in Illinois, that owes vendors $9 Billion that cannot be paid because of pension obligations.   Something has to give. 

States can't print money thankfully.  States, deemed too big to fail, will go to the federal government for a bail-out.   The broke federal government can print money and is doing so right now destroying the value of the dollar.   Printing money is the only way out; but it will cause high inflation and interest rates and a worthless dollar.   We are headed toward the economic collapse of the United States.   It is hard to see it any other way. 

Our elected leaders of both political parties have borrowed and spent our nation into bankruptcy just to win elections.   These characters should all be in jail not in city halls, state legislatures or Congress.   We are in for some very tumultuous times with an uncertain future.   Empires have fallen throughout history as a result of fiscal mismanagement.   This is our sad future. 

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