Tuesday, August 31, 2010

CHURCH, STATE, AND RELIGION ... WITH A LITTLE MILITARY FOR MEASURE


  ACTIONS SPEAK THE TRUE INTENTIONS

This is a gripping followup to the England Now video. Read it all!

Adapted from Dr. Peter Hammond's book: Slavery, Terrorism and Islam: The Historical Roots and Contemporary Threat

Islam is not a religion, nor is it a cult. In its fullest form, it is a complete, total, 100% system of life.

Islam has religious, legal, political, economic, social, and military components. The religious component is a beard for all of the other components.

Islamization begins when there are sufficient Muslims in a country to agitate for their religious privileges.

When politically correct, tolerant, and culturally diverse societies agree to Muslim demands for their religious privileges, some of the other components tend to creep in as well.

Here's how it works:
As long as the Muslim population remains around or under 2% in any given country, they will be for the most part be regarded as a peace-loving minority, and not as a threat to other citizens. This is the case in:

  • United States-- Muslim 0.6%
  • Australia-- Muslim 1.5%
  • Canada-- Muslim 1.9%
  • China-- Muslim 1.8%
  • Italy-- Muslim 1.5%
  • Norway-- Muslim 1.8%

At 2% to 5%, they begin to proselytize from other ethnic minorities and disaffected groups, often with major recruiting from the jails and among street gangs. This is happening in
:

  • Denmark-- Muslim 2%
  • Germany-- Muslim 3.7%
  • United Kingdom-- Muslim 2.7%
  • Spain-- Muslim 4%
  • Thailand-- Muslim 4.6%

From 5% on, they exercise an inordinate influence in proportion to their percentage of the population. For example, they will push for the introduction of halal (clean by Islamic standards) food, thereby securing food preparation jobs for Muslims. They will increase pressure on supermarket chains to feature halal on their shelves -- along with threats for failure to comply. This is occurring in:

  • France-- Muslim 8%
  • Philippines-- 5%
  • Sweden-- Muslim 5%
  • Switzerland-- Muslim 4.3%
  • The Netherlands-- Muslim 5.5%
  • Trinidad &Tobago -- Muslim 5.8%

At this point, they will work to get the ruling government to allow them to rule themselves (within their ghettos) under Sharia, the Islamic Law. The ultimate goal of Islamists is to establish Sharia law over the entire world.

When Muslims approach 10% of the population, they tend to increase lawlessness as a means of complaint about their conditions. In Paris, we are already seeing car-burnings. Any non-Muslim action offends Islam and results in uprisings and threats, such as in Amsterdam, with opposition to Mohammed cartoons and films about Islam. Such tensions are seen
daily, particularly in Muslim sections in:


  • Guyana-- Muslim 10%
  • India-- Muslim 13.4%
  • Israel-- Muslim 16%
  • Kenya-- Muslim 10%
  • Russia-- Muslim 15%

After reaching 20%, nations can expect hair-trigger rioting, jihad militia formations, sporadic killings, and the burnings of Christian churches and Jewish synagogues, such as in:
Ethiopia-- Muslim 32.8%

At 40%, nations experience widespread massacres, chronic terror attacks, and ongoing militia warfare, such as in:

  • Bosnia-- Muslim 40%
  • Chad-- Muslim 53.1%
  • Lebanon-- Muslim 59.7%

From 60%, nations experience unfettered persecution of non-believers of all other religions (including non-conforming Muslims), sporadic ethnic cleansing (genocide), use of Sharia Law as a weapon, and Jizya, the tax placed on infidels, such as in:

  • Albania-- Muslim 70%
  • Malaysia-- Muslim 60.4%
  • Qatar-- Muslim 77.5%
  • Sudan-- Muslim 70%

After 80%, expect daily intimidation and violent jihad, some State-run ethnic cleansing, and even some genocide, as these nations drive out theinfidels, and move toward 100% Muslim, such as has been experienced andin some ways is on-going in:

  • Bangladesh-- Muslim 83%
  • Egypt-- Muslim 90%
  • Gaza-- Muslim 98.7%
  • Indonesia-- Muslim 86.1%
  • Iran-- Muslim 98%
  • Iraq-- Muslim 97%
  • Jordan-- Muslim 92%
  • Morocco-- Muslim 98.7%
  • Pakistan-- Muslim 97%
  • Palestine-- Muslim 99%
  • Syria-- Muslim 90%
  • Tajikistan-- Muslim 90%
  • Turkey-- Muslim 99.8%
  • United Arab Emirates-- Muslim 96%

100% will usher in the peace of 'Dar-es-Salaam' -- the Islamic House of Peace. Here there's supposed to be peace, because everybody is a Muslim, the Madrasses are the only schools, and the Koran is the only word, suchas in:

  • Afghanistan-- Muslim 100%
  • Saudi Arabia-- Muslim 100%
  • Somalia-- Muslim 100%
  • Yemen-- Muslim 100%

Unfortunately, peace is never achieved, as in these 100% states the most radical Muslims intimidate and spew hatred, and satisfy their blood lustby killing less radical Muslims, for a variety of reasons.

'Before I was nine, I had learned the basic canon of Arab life. It was me against my brother; me and my brother against our father; my family against my cousins and the clan; the clan against the tribe; the tribe against the world, and all of us against the infidel. -- Leon Uris, 'The Haj'

It is important to understand that in some countries, with well under 100% Muslim populations, such as France, the minority Muslim populations live in ghettos, within which they are 100% Muslim, and within which they live by Sharia Law. The national police do not even enter these ghettos. There are no national courts, nor schools, nor non-Muslim religious facilities. In such situations, Muslims do not integrate into the community at large. The children attend madrasses. They learn only the Koran. To even associate with an infidel is a crime punishable with death. Therefore, in some areas of certain nations, Muslim Imams and extremists exercise more power than the national average would indicate.

Today's 1.5 billion Muslims make up 22% of the world's population. But their birth rates dwarf the birth rates of Christians, Hindus, Buddhists, Jews, and all other believers. Muslims will exceed 50% of the world's population by the end of this century.

Well, boys and girls, today we are letting the fox guard the henhouse. The wolves will be herding the sheep!

Obama appoints two devout Muslims to Homeland Security posts. Doesn't this make you feel safer already?

Obama and Janet Napolitano appoint Arif Alikhan, a devout Muslim, as Assistant Secretary for Policy Development.

DHS Secretary Janet Napolitano swore in Kareem Shora, a devout Muslim who was born in Damascus, Syria, as ADC Natio nal Executive Director as a member of the Homeland Security Advisory Council (HSAC).

NOTE: Has anyone ever heard a new government official being identified as a devout Catholic, a devout Jew or a devout Protestant...? Just wondering.

Devout Muslims being appointed to critical Homeland Security positions?
Doesn't this make you feel safer already??

That should make the U.S. homeland much safer, huh!!
Was it not "Devout Muslim men" that flew planes into U.S. buildings 8 years ago?


Was it not a Devout Muslim who killed 13 at Fort Hood?

Also: This is very interesting and we all need to read it from start to finish. Maybe this is why our American Muslims are so quiet and not speaking out about any atrocities.

Can a good Muslim be a good American?

This question was forwarded to a friend who worked in Saudi Arabia for 20 years. The following is his reply:



Theologically - no . . . Because his allegiance is to Allah, The moon God of Arabia
Religiously – no… Because no other religion is accepted by His Allah except Islam (Quran, 2:256)(Koran)
Scripturally - no… Because his allegiance is to the five Pillars of Islam and the Quran.
Geographically – no… Because his allegiance is to Mecca, to which he turns in prayer five times a day.
Socially - no… Because his allegiance to Islam forbids him to make friends with Christians or Jews..
Politically - no…Because he must submit to the mullahs (spiritual leaders), who teach annihilation of Israel and destruction of America, the great Satan.
Domestically - no… Because he is instructed to marry four Women and beat and scourge his wife when she disobeys him (Quran 4:34)
Intellectually - no… Because he cannot accept the American Constitution since it is based on Biblical principles and he believes the Bible to be corrupt.
Philosophically - no… Because Islam, Muhammad, and the Quran do not allow freedom of religion and expression.. Democracy and Islam cannot co-exist. Every Muslim government is either dictatorial or autocratic.
Spiritually - no… Because when we declare 'one nation under God,' the Christian's God is loving and kind, while Allah is NEVER referred to as Heavenly father, nor is he ever called love in The Quran's 99 excellent names. Therefore, after much study and deliberation....

Perhaps we should be very suspicious of ALL MUSLIMS in this country. - - - They obviously cannot be both 'good' Muslims and good Americans.

Call it what you wish, it's still the truth. You had better believe it. The more who understand this, the better it will be for our country and our future. The religious war is bigger than we know or understand. 


Can a muslim be a good soldier???

Army Maj. Nidal Malik Hasan, opened fire at Ft.Hood and Killed 13. He is a good Muslim!!!

Footnote: The Muslims have said they will destroy us from within. 
SO FREEDOM IS NOT FREE.

Monday, August 30, 2010

RELIGIOUS TOLERANCE OR FREEDOM TO WORSHIP ... ICONIC, SYMBOLISM, LOCATION

Newt Gingrich
There should be no mosque near Ground Zero in New York so long as there are no churches or synagogues in Saudi Arabia. The time for double standards that allow Islamists to behave aggressively toward us while they demand our weakness and submission is over.

The proposed "Cordoba House" overlooking the World Trade Center site – where a group of jihadists killed over 3000 Americans and destroyed one of our most famous landmarks - is a test of the timidity, passivity and historic ignorance of American elites. For example, most of them don’t understand that “Cordoba House” is a deliberately insulting term. It refers to Cordoba, Spain – the capital of Muslim conquerors who symbolized their victory over the Christian Spaniards by transforming a church there into the world’s third-largest mosque complex.

Today, some of the Mosque’s backers insist this term is being used to "symbolize interfaith cooperation" when, in fact, every Islamist in the world recognizes Cordoba as a symbol of Islamic conquest. It is a sign of their contempt for Americans and their confidence in our historic ignorance that they would deliberately insult us this way. Those Islamists and their apologists who argue for "religious toleration" are arrogantly dishonest. They ignore the fact that more than 100 mosques already exist in New York City. Meanwhile, there are no churches or synagogues in all of Saudi Arabia. In fact no Christian or Jew can even enter Mecca. And they lecture us about tolerance.

If the people behind the Cordoba House were serious about religious toleration, they would be imploring the Saudis, as fellow Muslims, to immediately open up Mecca to all and immediately announce their intention to allow non-Muslim houses of worship in the Kingdom. They should be asked by the news media if they would be willing to lead such a campaign.

We have not been able to rebuild the World Trade Center in nine years. Now we are being told a 13 story, $100 million megamosque will be built within a year overlooking the site of the most devastating surprise attack in American history.

Finally where is the money coming from? The people behind the Cordoba House refuse to reveal all their funding sources. America is experiencing an Islamist cultural-political offensive designed to undermine and destroy our civilization. Sadly, too many of our elites are the willing apologists for those who would destroy them if they could.

No mosque.
No self deception.
No surrender.

The time to take a stand is now - at this site on this issue.

Newt Gingrich.

Tuesday, August 24, 2010

WELL YOU DON'T NEED A GPS TO UNDERSTAND WHERE WERE GOING ...

FROM AUGUST 2010 NEWS ... WHERE WE ARE!

NOVEMBER 2008 ... WHERE WE CAME FROM!

WHERE ARE WE GOING ...



Morgan Stanley Says Government

Defaults Inevitable


By Matthew Brown - Aug 25, 2010
Investors face defaults on government bonds given the burden of aging populations and the difficulty of increasing tax revenue, according to a Morgan Stanley executive director.
“Governments will impose a loss on some of their stakeholders,” Arnaud Mares in the firm’s London office wrote in a research report today. “The question is not whether they will renege on their promises, but rather upon which of their promises they will renege, and what form this default will take.” The sovereign-debt crisis is global “and it is not over,” he wrote.
Rather than miss principal and interest payments, governments may choose a “soft” default in which they pay back debts with devalued currencies resulting from faster inflation or force creditors to take lower returns, Mares said in an interview.
Borrowing costs for so-called peripheral euro-region nations from Greece to Ireland surged today, resuming their ascent on concern that governments won’t be able to cut their budget deficits. Standard & Poor’s lowered Ireland’s credit rating yesterday on the rising cost of supporting nationalized banks.
Population trends may be a better predictor of the ability to meet obligations rather than debt as a percentage of gross domestic product, which doesn’t reflect governments’ available revenue and is “backward-looking,” Mares wrote.
While the U.S. government’s debt is 53 percent of GDP, one of the lowest ratios among developed nations, its debt as a percentage of revenue is 358 percent, one of the highest, the report said. Italy has one of the highest debt-to-GDP ratios, at 116 percent, yet has a debt-to-revenue ratio of 188, Mares said.
Double Dip
“Outright sovereign default in large advanced economies remains an extremely unlikely outcome, in our view,” the report said. “But current yields and break-even inflation rates provide very little protection against the credible threat of financial oppression in any form it might take.”
Mares, who didn’t identify which nations may default, once worked at the U.K.’s Debt Management Office and is a former senior vice-president at credit-rating company Moody’s Investors Service.
“Note that a double-dip recession would not invalidate this conclusion,” Mares’ report said. “It would cause yet further damage to the governments’ power to tax, pushing them further in negative equity and therefore increasing the risks that debt holders suffer a larger loss eventually.”
Investor concern that the U.S. may fall back into recession has grown in recent weeks as data missed economists’ estimates. A Citigroup Inc. index of U.S. economic data surprises fell to minus 59 last week, the least since January 2009.
Credit-Default Swaps
A report from the Commerce Department today showed U.S. durable goods orders increased 0.3 percent, compared with the 3 percent median estimate of 75 economists surveyed by Bloomberg News, figures showed today in Washington. The number of unemployment claims unexpectedly shot up by 12,000 to 500,000 in the week ended Aug 14, Labor Department figures showed Aug. 19.
Yields on German and U.S. benchmark securities sank today as investors sought the safest assets. U.S. two-year Treasury yields, at a four-month high 1.18 percent on April 5, fell to a record low 0.4542 percent yesterday.
Greek Debt Yields
The yield on Greek debt rose to more than 900 basis points above that of Germany today, the most since the European Union and International Monetary Fund created a 750 billion-euro ($948 billion) bailout package in May. Greece’s so-called yield spread over German debt was at 932 basis points as of 2:18 p.m. in London, short of the 973 basis-point record set on May 7. The Irish-German yield spread rose to a record 347 basis points, from 318 points yesterday.

Credit-default swaps that insure Irish government bonds against non-payment for five years rose 21 basis points to 331 today, the most since March 2009, according to data provider CMA. Greek swaps jumped to 921.5, the most since June, from 896.
“The conflict that opposes bondholders to other government stakeholders is more intense than ever, and their interests are no longer sufficiently well-aligned with those of influential political constituencies,” such as elderly voters and their claims on pensions and health insurance, Mares wrote.
To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net


DANCE OF THE VALKYRIES ...



Etymology

The word valkyrie derives from Old Norse valkyrja (plural valkyrjur), which is composed of two words; the noun valr(referring to the slain on the battlefield) and the verb kjósa (meaning "to choose"). Together, the means "chooser of the slain". The Old Norse valkyrja is cognate to Old English wælcyrge.[1] Other terms for valkyries include óskmey (Old Norse "wish girl"), appearing in the poem Oddrúnargrátr, and Óðins meyjar (Old Norse "Odin's girls"), appearing in theNafnaþulurÓskmey may be related to the Odinic name Óski (Old Norse, roughly meaning "wish fulfiller"), referring to the fact that Odin receives slain warriors in Valhalla.[2]

THERE ARE NO WORDS TO DESCRIBE THIS!!!!!

BROUGHT TO YOU, COURTESY OF YOUR LOCAL NEIGHBORHOOD MOSQUE.

THERE ARE NO WORDS TO DESCRIBE THIS!!!!!

MAY GOD HAVE MERCY ON US WHO TOLERATE THE MUSLIMS!!!









No religion  can ever justify such hideous crimes.... What sort of a civilization is this?

Wednesday, August 18, 2010

WHEN IS GRAY NOT GRAY, OR WHEN IS THE N-WORD NOT A WORD BUT AN INSULT?

Believe it or not, in the graphic below, the squares labeled A and B are the same shade of grey!

This is perhaps one of the best optical illusions I’ve seen. It demonstrates why we need objective color and light meters (and science) as our eyes will often deceive us. Believe it or not, in the graphic below, the squares labeled A and B are the same shade of grey! For a proof of this and explanation why our eyes don’t see the squares as being the same shade, see:

http://web.mit.edu/persci/people/adelson/checkershadow_illusion.html
Dr. Laura ... tells it like it is ... its not racism, its speech!
I’m be looking for a good slide presentation to drop this into to demonstrate the value and need for objective scientific measurements.

Tuesday, August 17, 2010

THE AMAZING RISE AND SCANDALOUS FALL OF LIBERALISM ... STARTING NOVEMBER 3, 2010

THE THREE MINUTE DRILL ... NOVEMBER 2, 2010 ... WAKE UP ... DRIVE TO POLLING ... EXPRESS YOURSELF ... VOTE!!!




A very accurate assessment of what is going on in America today.

Overwhelm The System

Wayne Allyn Root



Barrack Obama is no fool. He is not incompetent. To the contrary, he is brilliant. He knows exactly what he's doing. He is purposely overwhelming the U.S. economy to create systemic failure, economic crisis and social chaos -- thereby destroying capitalism and our country from within.
Barack Obama is my college classmate ( Columbia University , class of '83). As Glenn Beck correctly predicted from day one, Obama is following the plan of Cloward and Piven, two professors at Columbia University . They outlined a plan to socialize America by overwhelming the system with government spending and entitlement demands. Add up the clues below. Taken individually they're alarming. Taken as a whole, it is a brilliant, Machiavellian game plan to turn the United States into a socialist/Marxist state with a permanent majority that desperately needs government for survival ... and can be counted on to always vote for bigger government. Why not? They have no responsibility to pay for it.

-- Universal health care. The health care bill had very little to do with health care. Â It had everything to do with unionizing millions of hospital and health care workers, as well as adding 15,000 to 20,000 new IRS agents (who will join government employee unions). Obama doesn't care that giving free health care to 30 million Americans will add trillions to the national debt. What he does care about is that it cements the dependence of those 30 million voters to Democrats and big government. Who but a socialist revolutionary would pass this reckless spending bill in the middle of a depression?

-- Cap and trade. Like health care legislation having nothing to do with health care, cap and trade has nothing to do with global warming. It has everything to do with redistribution of income, government control of the economy and a criminal payoff to Obama's biggest contributors. Those powerful and wealthy unions and contributors (like GE, which owns NBC, MSNBC and CNBC) can then be counted on to support everything Obama wants. They will kickback hundreds of millions of dollars in contributions to Obama and the Democratic Party to keep them in power. The bonus is that all the new taxes on Americans with bigger cars, bigger homes and businesses helps Obama "spread the wealth around."

-- Make Puerto Rico a state. Why? Who's asking for a 51st state? Who's asking for millions of new welfare recipients and government entitlement addicts in the middle of a depression?  Certainly not American taxpayers. But this has been Obama's plan all along. His goal is to add two new Democrat senators, five Democrat congressman and a million loyal Democratic voters who are dependent on big government.

-- Legalize 12 million illegal immigrants. Just giving these 12 million potential new citizens free health care alone could overwhelm the system and bankrupt America . But it adds 12 million reliable new Democrat voters who can be counted on to support big government. Add another few trillion dollars in welfare, aid to dependent children, food stamps, free medical, education, tax credits for the poor, and eventually Social Security.

-- Stimulus and bailouts. Where did all that money go? It went to Democrat contributors, organizations (ACORN), and unions -- including billions of dollars to save or create jobs of government employees across the country. It went to save GM and Chrysler so that their employees could keep paying union dues. It went to AIG so that Goldman Sachs could be bailed out (after giving Obama almost $1 million in contributions). A staggering $125 billion went to teachers (thereby protecting their union dues). Al l those public employees will vote loyally Democrat to protect their bloated salaries and pensions that are bankrupting America . The country goes broke, future generations face a bleak future, but Obama, the Democrat Party, government, and the unions grow more powerful. The ends justify the means.

-- Raise taxes on small business owners, high-income earners, and job creators. Put the entire burden on only the top 20 percent of taxpayers, redistribute the income, punish success, and reward those who did nothing to deserve it (except vote for Obama). Reagan wanted to dramatically cut taxes in order to starve the government. Obama wants to dramatically raise taxes to starve his political opposition.

With the acts outlined above, Obama and his regime have created a vast and rapidly expanding constituency of voters dependent on big government; a vast privileged class of public employees who work for big government; and a government dedicated to destroying capitalism and installing themselves as socialist rulers by overwhelming the system.

Add it up and you've got the perfect Marxist scheme -- all devised by my Columbia University college classmate Barack Obama using the Cloward and Piven Plan.

There are people that will simply read and delete this... maybe not read it at all.
There are others that are so wrapped up with Obama-mania that they will never accept any criticism of him.
There are those that say, 'I'm too old to worry about this crap... it's not going to affect me'!
Finally, there are professional blood-suckers that live off everyone else's sweat -- they want more 'Free Stuff'. And we all know where they stand.
If you care about your future, or maybe your children or grandchildren's future, do something now.
Vote the bums out of office this November. And, make Obama a one-term president.

Sunday, August 15, 2010

NEVER DRAW TO AN INSIDE STRAIGHT ...

SIMPLE TRUTHS HOLD INSTITUTIONS TOGETHER ... THE YELLOW BRICK ROAD LEADS TO CHINA ...




Thursday, August 12, 2010

CINDERELLA ELECTIONS, MIDNIGHT IN THE GARDEN OF EVIL AND THE CANDY MAN

AS BAD AS THE SITUATION APPEARS OR IS ... THE STROKE OF MIDNIGHT ON NOVEMBER 2, 2010 WILL NOT CHANGE ANYTHING.
... the methods are at issue. Has all the damage been done that can or will be done?

Wednesday, August 11, 2010

BEYOND THE DELIVERY ROOM ... NOW WHAT?







I WANT YOUR MONEY ... MOVIE TRAILER ... SET ASIDE THE TIME

PIN'S AND NEEDLE'S WRAPPED IN STUPIDITY ...

House Republicans Suggest Names for Democrats’ Untitled, $26-Billion ‘Second Stimulus’ Bill
Tuesday, August 10, 2010
By Susan Jones, Senior Editor


-- Save Our ‘Stimulus’ (SOS) Act
-- ‘Recovery Summer’ Bailout Act (Cash for Flunkers)
-- Delivering Unions a Major Boost (DUMB) Act
-- Helping Election Expenditures, Hurting American Workers (HEEHAW) Act
-- Democracy is Strengthened by Clearly Leveraging and Optimizing Special-Interests’ Effectiveness (DISCLOSE) Act
-- Holding Union Bosses Over Until Card Check Act
-- Rescuing Incumbent Democrats Is Costly (RIDIC) Act
-- Summertime Cash for Union Bosses Instead of Spending Cuts for Taxpayers Act
-- Frivolous Act of Ineffective Largesse (FAIL) Act
-- Naming These Things Hasn’t Gotten Us Anywhere, So Why Bother? Act


U.S. Is Bankrupt and We Don't Even Know It: Laurence Kotlikoff

Bloomberg Opinion
Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.
What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy.
Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”
But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: “The U.S. fiscal gap associated with today’s federal fiscal policy is huge for plausible discount rates.” It adds that “closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.”
The fiscal gap is the value today (the present value) of the difference between projected spending (including servicing official debt) and projected revenue in all future years.
Double Our Taxes
To put 14 percent of gross domestic product in perspective, current federal revenue totals 14.9 percent of GDP. So the IMF is saying that closing the U.S. fiscal gap, from the revenue side, requires, roughly speaking, an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as the payroll levy set down in the Federal Insurance Contribution Act.
Such a tax hike would leave the U.S. running a surplus equal to 5 percent of GDP this year, rather than a 9 percent deficit. So the IMF is really saying the U.S. needs to run a huge surplus now and for many years to come to pay for the spending that is scheduled. It’s also saying the longer the country waits to make tough fiscal adjustments, the more painful they will be.
Is the IMF bonkers?
No. It has done its homework. So has the Congressional Budget Office whose Long-Term Budget Outlook, released in June, shows an even larger problem.
‘Unofficial’ Liabilities
Based on the CBO’s data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt. This gargantuan discrepancy between our “official” debt and our actual net indebtedness isn’t surprising. It reflects what economists call the labeling problem. Congress has been very careful over the years to label most of its liabilities “unofficial” to keep them off the books and far in the future.
For example, our Social Security FICA contributions are called taxes and our future Social Security benefits are called transfer payments. The government could equally well have labeled our contributions “loans” and called our future benefits “repayment of these loans less an old age tax,” with the old age tax making up for any difference between the benefits promised and principal plus interest on the contributions.
The fiscal gap isn’t affected by fiscal labeling. It’s the only theoretically correct measure of our long-run fiscal condition because it considers all spending, no matter how labeled, and incorporates long-term and short-term policy.
$4 Trillion Bill
How can the fiscal gap be so enormous?
Simple. We have 78 million baby boomers who, when fully retired, will collect benefits from Social Security, Medicare, and Medicaid that, on average, exceed per-capita GDP. The annual costs of these entitlements will total about $4 trillion in today’s dollars. Yes, our economy will be bigger in 20 years, but not big enough to handle this size load year after year.
This is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck.
Herb Stein, chairman of the Council of Economic Advisers under U.S. President Richard Nixon, coined an oft-repeated phrase: “Something that can’t go on, will stop.” True enough. Uncle Sam’s Ponzi scheme will stop. But it will stop too late.
And it will stop in a very nasty manner. The first possibility is massive benefit cuts visited on the baby boomers in retirement. The second is astronomical tax increases that leave the young with little incentive to work and save. And the third is the government simply printing vast quantities of money to cover its bills.
Worse Than Greece
Most likely we will see a combination of all three responses with dramatic increases in poverty, tax, interest rates and consumer prices. This is an awful, downhill road to follow, but it’s the one we are on. And bond traders will kick us miles down our road once they wake up and realize the U.S. is in worse fiscal shape than Greece.
Some doctrinaire Keynesian economists would say any stimulus over the next few years won’t affect our ability to deal with deficits in the long run.
This is wrong as a simple matter of arithmetic. The fiscal gap is the government’s credit-card bill and each year’s 14 percent of GDP is the interest on that bill. If it doesn’t pay this year’s interest, it will be added to the balance.
Demand-siders say forgoing this year’s 14 percent fiscal tightening, and spending even more, will pay for itself, in present value, by expanding the economy and tax revenue.
My reaction? Get real, or go hang out with equally deluded supply-siders. Our country is broke and can no longer afford no- pain, all-gain “solutions.”
(Laurence J. Kotlikoff is a professor of economics at Boston University and author of “Jimmy Stewart Is Dead: Ending the World’s Ongoing Financial Plague with Limited Purpose Banking.” The opinions expressed are his own.)
To contact the writer of this column: Laurence Kotlikoff at kotlikoff@bu.edu