The U.S. national debt as of February 2014 is said to be 17.25 Trillion dollars. That number, as large as it is, could be paid off over the course of the next few decades if the U.S. ended its welfare programs (both personal and corporate), stopped all wars, ended the empire, brought all troops home from overseas, and stopped the domestic drug war with all its associated costs. The state could do that, but it will not.
There are a lot of reasons why the U.S. will not do the things mentioned above to stop adding to the mounting debt and to pay off the accumulated debt; but one of the biggest reasons is that the overlords of the state know that the 17.25 Trillion number is pure bunk. The real number is more like 150 Trillion once you add in the unfunded liabilities. With 320 million or so Americans alive today (including the illegal ones we don’t count) the share of each man, woman, and child of the debt is about $468,750 and that means the average family of four has a burden of about $1,875,000. The ruling elite knows that we will never pay off that kind of debt — a debt that was squandered on empire and politician’s deluded pet projects and cronies. How exactly would you personally do paying off your half million dollar part of the debt?
Let us suppose that the people of the U.S. suddenly developed some backbone and morality and demanded that all debt be liquidated and all liabilities be adequately funded or ended. How could that be done? How indeed. After all, borrowing money from other countries to pay current expenses has gone about as far as it can go and we see China and others reducing their U.S. debt securities at the present time. Besides, borrowing money to pay off debt has never been an option for anyone.
With just borrowing money to overcome the problem not a solution, the first thing that could be done is to downsize the U.S. government to a tiny fraction of its present size and repeal nearly all federal laws, rules, and regulations. This would cause a large amount of useless paper shufflers to be suddenly unemployed and it might take a few years for the private sector to create enough jobs for everyone that wants to work but it would happen without any interventions from the state. But that would only be a start. Even a laissez-faire economy with all its creativity and productivity can not be expected to pay off generations of mis-spent wealth.
Next, the nation would have to repudiate all debts and liabilities. The state would declare bankruptcy in effect. Some say that funding for the elderly who paid into the evil state all their lives would be the only moral course and they may be right. But it remains to be seen if even just the elderly could be funded and the nation still end the specter of future obligations hanging over the heads of the people. OK, but what if the nation would not consider drastic and draconian measures? I rather suspect that everyone wants to keep their crony-cap deals and entitlements. I think that if the U.S. federal government tried the medicine I outlined above then there would be a revolution and the state would fall. A pleasant thought perhaps, but not one that seems likely to happen in that way. The state is addicted to spending huge sums on its favored supporters.
If stopping all the spending and repudiating the mountain of liabilities is not in the cards, then the nation will be forced to inflate the debt away just as countries around the world have done in the past. This use of inflation is a favored method of U.S. politicians because it takes from everyone, especially the working class, while making it look like that the “evil, greedy” merchants are the culprits. The problem the elite have now is that the U.S. Dollar is the world’s reserve currency and other nations know all about hyper-inflation and that inflation steals from them also since they hold huge amounts of dollars. These other countries will look to dump the dollar and not be party to paying off the madness of the U.S. government. So what happens when the other countries dump the dollar? Then the dollar’s value collapses even faster and there would be no more borrowing at all from other countries and not much buying from them either. Say, do we make anything in the U.S. anymore?
In reality, the U.S. can reduce its spending and find a way to eliminate its unfunded liabilities or it can use massive inflation — there is no other course to take. It is obvious to me that we will take the massive inflation route, after all we have been doing that for a long time now. When will the inflation rate reach the economy killing stage? That is hard to predict but the signs are that we are very close now. What happens then? Why the U.S. as a nation state dies and massive unrest and revolution will unfold just as we have seen across the world when the people are left destitute.
What should anarchists be doing? I think we try to convince our fellow Americans that it is the state that brought us the pain we are going through and that replacing one version of the state with a slightly different version of the state is madness. It is time to try something completely different. It is time to let the people deal with each other through the free market. The market can replace the state and the people can mutually cooperate with one another.