Rolling Back Racing Debt
Rollback: Repealing Big Government Before the Coming Fiscal Collapse, by Thomas E. Woods, Jr., Regnery Publishing Inc., 2011, 232 pages, hardcover.
The destruction of the American Republic will not come at the hands of terrorists nor, in all likelihood, from any nation or coalition of nations arrayed against us. It will be done by us, and we are making great progress at it, as Thomas E. Woods, Jr. amply demonstrates in his latest book, Rollback: Repealing Big Government Before the Coming Fiscal Collapse. From prescription drug benefits under Medicare to the maintenance of a worldwide empire of military bases and commitments, all of the government programs and policies that have enjoyed public approval over the years and decades have piled up a national debt that now stands at more than $14 trillion, with another $1 trillion to $1.5 trillion added each year. But, Woods points out, that doesn’t count the unfunded liabilities of “off budget” programs like Social Security and Medicare. Add those in and the debt is $111 trillion. The Congressional Budget Office has projected annual interest payments alone on the national debt will reach nearly a trillion — $925 billion — by the year 2020. You could fund a lot of domestic programs and buy a lot of bombers and fighter planes with $925 billion, and we have been. That’s the problem. Here is one of several economic analyses quoted by Woods:
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.... 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 run at passing the buck.
That description of Social Security and Medicare was written not by a right-wing zealot, but by Lawrence Kotlikoff, an economist at Boston University and a Democrat. Kotlikoff estimates the gap between revenue and spending commitments will reach $200 trillion and foresees three possible government responses: Benefits will be cut while the “boomers” are still alive to enjoy (or endure) their retirement; taxes will be raised so high that the young will have little incentive to work and save; or, perhaps the most frightening of all, hyperinflation by “the government simply printing vast quantities of money to cover its bills.” To which Woods adds, “More than likely, we’ll see all three.”
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