The big lie of the welfare state

Economist Thomas Sowell has pointed out many times how our leaders lie to us and withhold important information that citizens need to know. The true financial health of the US Empire is one of those:

The fact that so many successful politicians are such shameless liars is not only a reflection on them, it is also a reflection on us. When the people want the impossible, only liars can satisfy them, and only in the short run. The current outbreaks of riots in Europe show what happens when the truth catches up with both the politicians and the people in the long run.

Among the biggest lies of the welfare states on both sides of the Atlantic is the notion that the government can supply the people with things they want but cannot afford. Since the government gets its resources from the people, if the people as a whole cannot afford something, neither can the government. ~ Thomas Sowell

The truth is that the welfare state is bankrupt and that truth is getting very hard for the minions of the State to hide. The US Empire is around 222 Trillion dollars in debt when you look at the present value of future obligations. The government demands that business report accurately their present value of future obligations, so why should we not hold government to that same accounting standard? After all, if “the people” are the ones in charge in this democracy then the people need accurate information.

Look at Social Security; it is a sacred cow to liberals and progressives in this country, but even most regular people think of it as an institution that we can not do without. But Social Security is a Ponzi scheme. The entire left, most moderates, and even some “conservatives” will go gunning for anyone who calls Social Security a Ponzi scheme. It doesn’t matter what lying politicians or pundits say; the Social Security system is a Ponzi scheme and it will go bust. It must go bust just as any Ponzi scheme must go broke. But Medicare is an even larger Ponzi scheme than Social Security and so it will also go bust.

ponzi_schemes_pyramid

Between Social Security, Medicare, and Medicaid: keeping the promises of those programs will bring down the federal government. There will be hyperinflation or a default on government obligations. I believe the government will default on all of its debts but the future is notoriously hard to predict.

Now certainly the people who are dependent upon Social Security don’t want to hear all this. They want to believe that they paid into the system and their money is there in a bank someplace. But the reality of the system is that the “Social Security taxes” go straight into the general budget as do taxes for Medicare and Medicaid. There is no “trust fund”. There is only a massive government running a Trillion dollar a year deficit to fund these programs and all the rest of the programs of the welfare state.

The simple truth is that government can not manufacture wealth. It can not give the masses more than the masses already have because the government just takes wealth from the masses to fund all of its wars and welfare programs — after taking a huge chunk of money for “administrative expenses”. (think of the fraudulent private charities that you have read about)

The problem facing politicians in the US is that they cannot break the cycle of ever increasing debt as that would mean they must end the Ponzi schemes. The people who are dependent on the programs, and they were made dependent by the welfare state, can not get off the merry-go-round themselves. And so, the systems will continue to grow until such time as they bankrupt the entire government.

When the government goes bankrupt there will be a political revolt. The younger ones paying into the system will demand a change and that means an end to the welfare state. At that point in time, the US empire will fail just as the USSR did in 1991.

Hang on to your hat, it is going to be a bumpy ride.

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