Real Debt Cut by USA Plan
Amount of Unfunded Debt eliminated on the date the USA Plan is enacted.
Debt is debt. The fact that politicians call it “unfunded” doesn’t mean it’s merely a “promise”. It still is debt. Several years ago, General Motors went bankrupt in part because it had an “unfunded debt” of $50 billion to the United Auto Workers. Their auditors recorded that debt on GM’s financial statements because if they hadn’t, they would have been thrown in jail.
This begs the question “Why do the press, politicians and our talking heads on TV tell us the National Debt is $22 trillion instead of the actual $144 trillion?” Chances are you don’t know their misleading story.
In early 1940, Congress went to the Supreme Court to prove that Social Security was not an enforceable contract. The Court agreed and ruled that since Congress could change the law at any time it was not an enforceable contract. SCOTUS did not say it was not an enforceable law. Just that it was unenforceable until the law was changed. They ruled on this most technical of unlikely events.
“…as to all of the unfunded liabilities of $122 Trillion we estimate that $70 trillion can be written off the books on the day the USA Plan is enacted.”
Now for the facts and the truth. Younger people believe Social Security will go bankrupt before they can collect their benefits. This is due to Social Security’s enormous “unfunded liability”. The USA Plan was designed to stop this gross deception by politicians.
In fact, we believe that all of the 80 or so government entitlement programs will drastically shrink in light of the “lottery-styled nest egg” provided by the USA plan. Even those with reasons to not earn much during their 40-year working life will end up as millionaires. (Click here to see chart when a $20,000 a year worker still ends up with a $1.6 million retirement package.)
As a part of the proof of a massive reduction of unfunded debt on the date the Plan is enacted we have a few examples:
The $20,000 a year worker would generate enough interest income in his USA Account in his 21st year to pay the same amount of monthly income that Social Security pays for a complete 40-year working life.
The same applies to an average worker’s salary of $50,000 a year. He generates enough interest income from the balance in his USA in the 13th year to cover what Social Security would have paid him after he was 65.
At this point, there is no need to recognize all “unfunded liabilities”. The taxpayer can rely on his USA to fund his retirement.
We have made rough calculations as to all of the unfunded liabilities of $122 Trillion. We estimate that $70 trillion can be written off the books on the day the USA Plan is enacted.
The $70 trillion cut is more than enough to cover the transition cost to the USA Plan.
Of course, an army of actuaries will be needed to verify this figure, but we feel it is understated enough to offset any objections.
Also, see “Social Security Benefit Calculator“