Obama plans to borrow more money over the next eight years than all of the other presidents – combined.
It's very hard to put this in perspective. The numbers have become so large they're almost meaningless. "Twenty trillion" has 13 zeros: $20,000,000,000,000. Nobody can think about a number that large. But consider this... In 1980, the entire federal debt totaled $930 million. Assuming we're paying 5% on our debt in 2019, we will spend more money on interest than our entire national debt of 1980.
Keep in mind these figures don't include any of the off-budget items, like the obligations of Fannie Mae and Freddie Mac – both of which are insolvent. That's roughly $2 trillion. They don't include any of the unfunded future liabilities of the U.S. government – the estimated $40 trillion net present value of the entitlement programs. And perhaps most importantly, they don't cover any of the pension guarantees the U.S. government supports via the Pension Benefit Guarantee Corp. (PBGC) – one of the dozens of fraudulent insurance schemes that keep the fiction of the government's accounting alive.
PBGC – like the FDIC – is quick to tell anyone who looks at its website that it doesn't take any taxpayer money. And right now, it doesn't. But when General Motors goes bankrupt, how will PBGC finance the huge deficits of the car company's pension program, which amounts to more than $50 billion? What about when local governments start going broke because they can't afford to pay the pension guarantees they made to their cops and firefighters, who retire with full pay in their mid-40s? Right now, PBGC's total assets are something around $60 billion – and some of that was invested in the stock market.
It's impossible to know the government's real liabilities right now, thanks to all of the off-balance sheet items and quasi-governmental insurance groups. But you can make a rough estimate...
Let's say $20 trillion for the on-balance sheet spending. Another roughly $50 trillion is coming for unfunded entitlement programs, and probably another $10 trillion for all of the various guarantees to PBGC, FDIC, and Fannie/Freddie. That gets us to something around $80 trillion by 2019 – and my estimate is likely too conservative by a large percentage because it assumes tax revenues can grow substantially.
There are roughly 100 million families in America. How many families do you know can afford to add another $80,000 in debt to their balance sheets? That's how much money we'll owe, per family, by 2019 – and that's just for the federal government's debt. That doesn't include state or local governments, and it doesn't include any personal or corporate debt.
This is going to be a huge problem because no one will want to pay the money back – ever. And it can't be financed forever. The poor will blame the rich. The rich will leave and take their wealth offshore. And absolute chaos will follow. The dollar will be completely destroyed.
It's critical for you to take precautions now, while you still can. And tomorrow, I'll explain what every individual investor can do to protect his wealth and his family.
Good investing,
Porter Stansberry
P.S. I realize it's paradoxical. But the coming crisis will make lots of people rich. It's not hard to generate a paper fortune in a huge inflation…
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