Get Out of Debt Card

By Rich Kozlovich

(Editor's Note:  I originally wrote and published this article on January 30, 2013 and May 2, 2017, and I decided to publish it again today as a result of this very excellent article, DOGE takes on the Social Security monster, by Monica Showalter about the corruption leading to bankruptcy at the Social Security Administration, and it seems I have to keep publishing it.  RK)  

What is the news worth knowing and why don’t we know it?  Let’s just deal with domestic issues, primarily the budget and the nation’s debt.  There is more hot air circulating about this than there is even about Lance and Oprah.  Most of it meaningless because the economy really is far worse than the main stream media reports and important facts are being ignored by those in leadership positions!  Why?

Let’s start with the cost of regulations, because they will amount to the same thing to business and the consumers, higher costs.  It was estimated that it would cost the American consumer 1.75 trillion dollars to pay for the regulations imposed by the federal government.  Although that number is disputed because of the way in which that figure was computed, it has to be recognized that it is high and we know it is growing.  And it is the consumer that pays those costs, because as businesses costs go up prices go up.  At least until the costs get so high that they go out of business because the consumer can no longer afford it.   

According to Warner Todd Huston  on January 16^th there has been an increase of  $518 Billion in Regulations Since Obama Took Office.  He goes on to say:

Despite Obama's promise to cut unnecessary regulations, his administration issued $236.7 billion in new rules in 2012.   According to a report by the American Action Forum, headed by former Congressional Budget Office Director Douglas Holtz-Eakin, the direct costs of the regulations force American businesses to waste 87 million man-hours to fill out regulatory paperwork. Adding Obama's 2012 regulatory costs to that of the rest of his first term adds up to a total of $518 billion in new costs forced onto an already anemic economic recovery. ….

 

Indeed, in 2011, Obama released a plan claiming he would cut regulations and reduce the burden on the business sector. Not long after, Obama operative Cass Sunstein praised Obama, claiming that his plan would work "to eliminate unjustified regulatory costs and to reduce burdens." Sunstein went on to say that Obama had done more to cut government red tape than any president in recent history.   Sunstein was given one Pinocchio for his misleading claims, and for good reason, as Obama's small cuts have been dwarfed by the increases.   American Action Forum says that the costs of regulations have "added tremendous costs to the economy" and finds that the year 2012 tops every year in the past twelve in "terms of final rule cost." 

Regulations are an unseen tax on the poor.  Since these impositions, whether needed or not, raise the cost of all products and services. 

On January 14, 2013 Hans Bader wrote and article, Obamacare Imposes New Fees, Cost Increases On The Public, dealing with this issue reporting:

Obamacare was sold to the public based on the fallacy that it would cut healthcare costs, but each month brings additional evidence that it will drive up healthcare costs instead. The New York Times reported last week that “health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers. Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own. In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders.” Earlier, Obamacare resulted in hikes of 41-47 percent in health insurance premiums for some policyholders in Connecticut. The Times notes that in “other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders

 On January 17^th John Hayward wrote an article, ‘Uncle Sam’s hoarded, wasted wealth”, noting that it is impossible for Washington to go bankrupt due to lack of assets.  He says that:

The federal government is racking up a trillion dollars in bills each year that it cannot pay.  It long ago passed the point where any private-sector business or individual would have been required to declare bankruptcy, if not face charges of mental incompetence to manage their own affairs. But Washington is not really “poor.”  It is very rich in assets, which it could sell or lease to pay its bills, without raising anyone’s taxes.  Many of these assets would produce health economic activity in the hands of private investors, while Uncle Sam leaves them strewn carelessly across the landscape, like toys he refuses to put away after playing with them.

The Institute for Energy Research just released a new study that inventories these “vastly underutilized” federal assets:

Federal real property totals over 900,000 assets with a combined area of over 3 billion square feet and more than 41 million acres of land. Additionally, the federal government owns over 600 million acres of lands and minerals onshore, and owns or manages a total of approximately 755 million acres of onshore subsurface mineral estate.  Offshore, the federal government owns some 1.76 billion acres of lands and mineral estate, extending out 200 nautical miles from our shores.  The federal government’s total mineral estate holdings are therefore about 2.515 billion acres of lands.  Thus, the federal government’s mineral estate land holdings surpass the total surface land area of the nation of Canada.

In fiscal year 2009, federal agencies reported 45,190 underutilized buildings, an increase of 1,830 underutilized buildings from the previous fiscal year. In fiscal year 2009, these underutilized buildings accounted for $1.66 billion in annual operating costs, according to the General Accounting Office (GAO). The majority of federally owned and leased space is held by the Departments of Defense and Veterans Affairs, the U.S. Postal Service, and the General Services Administration (GSA). 

For example, the federal government’s landlord, the GSA, owns or leases 9,600 assets with more than 362 million square feet of workspace. According to the GSA, in a 2009 report, almost 40 percent of its assets were under performing. In October 2010, a congressional study evaluated the savings that could occur based on better administration of the government’s above ground assets that totaled over several hundred billion dollars.

How much is all this worth?

IER estimated the worth of the government’s oil and gas technically recoverable resources to the economy to be $128 trillion, about 8 times our national debt. Further, the Congressional Budget Office (CBO) estimated that state and national coffers could generate almost $150 billion over a 10 year period from royalties, rents, and bonuses if these resources were immediately opened to oil and gas leasing. The CBO study estimates are considered to be conservative when compared to historical data and estimates by other analysts and do not consider the earnings from taxes paid by these industries. IER estimated the government’s coal resources in the lower 48 states to be worth $22.5 trillion for a total worth to the economy of fossil fuels on federal lands of $150.5 trillion, over 9 times our national debt. Most of the coal resources in Alaska are deemed to be federally owned and are estimated to be 60 percent higher than those in the entire lower 48 states but are not included in these estimates.

So why are we in debt?  The other thing that is discussed a great deal is the Debt Ceiling and Default.  Both of which are apparently not being reported properly.

On January 14, 2013  J.D. Foster, Ph.D. wrote this article.  “Debt Ceiling: Default Not at Issue, Federal Spending Is”.  He says;

“The only way the federal government would default on its debt in the event the debt ceiling remains unchanged is for the Treasury to choose to default—…... Suggestions to the contrary in the press and elsewhere are simply inaccurate and shameful.  The amount of debt the federal government is allowed to issue is set by statute. Federal spending is similarly established by law.

Treasury is at once prohibited by law from issuing additional debt above the limit and obligated by law to spend certain amounts for designated purposes. …..If the federal government exhausted its financial management tools, then government spending would be limited to incoming receipts. At that point, the law setting a debt limit and the laws in place directing government spending would conflict—something would have to give…...

Very simply, reaching the debt limit means spending is limited by revenue arriving at the Treasury and is guided by prioritization among the government’s obligations. How the government would decide to meet these obligations under the circumstances is a matter of some conjecture.

One thing is clear.  When those in responsible positions don’t tell the truth and those in the media don’t report the truth we have to ask why?  It is clear that the national debt could be paid, the money owed to the Social Security Administration could be repaid, and Medicare and Medicaid could be solvent.  Admittedly there would still have to be changes, but when we also realize the interest on the national debt in fiscal year 2011 was $454 billion, the highest ever in spite of the lowest interest rate in 200 years,  it must become clear that ending the debt is the first change necessary.  And apparently that can be done. 

The questions that once again must be asked are these. What is the news worth knowing, why don’t we know it, and why aren't we hearing about this on the six o’clock news?