About Debtism.com

 

A nation stops saving when the tax adjusted return is less
than the rate of decline in purchasing power of the currency!!

 

by: John Koraska

Revised November 19, 2007

 

For Social Security updates please visit my new website US Public Policy

 

 

 

Conditions for Debtism are created when a government decides tax money designated for specific purposes may be diverted to unrelated programs.  In the US for example, special non-marketable debt instruments (IOUs) are created and placed in designated trust funds. Surplus cash is spent on other programs, politicians decide have higher immediate priorities. The interest on the so-called Trust fund assets is paid with more IOUs. The Trust Fund debt compounds in reverse fashion to compounding interest on real assets. The preference to substitute debt for money is made to avoid printing massive amounts of the latter that always leads to uncontrollable inflation.


A relatively new development in the practice of debtism is the final stage of these economic practices. A new word - hyperdebtism - was created to define the terminal stage. Massive imbalance between implicit and explicit government obligations and the future tax base that must support it become insufficient to pay the bills. The US government has created more explicit & implicit debt and social commitments than can possibly be fully redeemed. Public recognition of this fact precedes the socio-economic crisis that follows. 

 

debtism and hyperdebtism

 

debtism n 1. A uniquely American socio-economic, fiat currency, tax and welfare arrangement created by unconstitutional law. 2. A fraudulent monetary system based on a fiat currency and fractional reserve banking that creates corruptive capital imbalances between equity and debt. 3. A scheme that encourages debt with tax incentives and devastates savings by taxing the inflation produced by a depreciating currency. 4. A practice of perpetual government borrowing to sustain an indebted consumerist driven economy until the currency and the economy collapses.

 

hyperdebtism: A terminal stage of debtism exists; when debt, that has been substituted as currency, becomes practically worthless and government credibility suffers because of credit status downgrades by a foreign power and/or the loss of public confidence in the government to fulfill its obligations. The main cause of hyperdebtism is a massive imbalance between the supply of quality currency and/or the loss in credibility of government to fund programs; and the demands of beneficiaries dependent on the programs. 

 The diversion of funds designated for specific purposes may remain hidden for long periods of time. The fraud can operate only as long as the public believes there are sufficient resources to fulfill government obligations. The public may be slow to recognize the truth since it can be concealed by legalistic complexity and accounting obfuscation. 

As the truth emerges, public confidence in government policies weakens. A complete loss of faith in a government’s ability to fully pay debts and fulfill commitments is hyperdebtism.  The printing presses start up, value of the currency declines and interest rates soar until a new regime takes over.  see hyperinflation 

 No matter how much is borrowed or has been diverted from its legal or illegal destination;  the total explicit and implicit government debt and obligations increasingly outstrips the availability of money or other resources until the public recognizes the massive imbalances and that financial conditions are out of control.  

 Full faith and credit in a nations ability to pay it bills rings hollow when the public learns their retirement savings have been squandered. Many must work the remainder of their lives to survive, because the government betrayed their trust. 

 

The public quandary resulting from failed tax, welfare, fiscal, and monetary policies is not surprising. Employees suffer from job insecurity and the uncertainty of providing for current and future needs. Their fear is not baseless. Many young people believe Social Security will not be there when they retire or become disabled. There is reasonable basis ($trillions in unfunded liabilities & unsustainable debt) that support the possibility. Retiree's and those near retirement fear running out of money, having the government take it away from them, having their pension fund go bankrupt, having their investments deteriorate in value and/or suffer a debilitating injury or illness that doesn't kill but renders them unable to take care of themselves.

 

Both employees and retirees have a sense of helplessness that is fostered by political rhetoric, reinforced by the media that often instills fear into the American psyche. Individuals taking more direct control of their own lives instead of trusting in government or other institutions to act in their best interests can expel much of the angst and uncertainty.

 

ABOUT THE AUTHOR

 

Recognizing that credibility of information is vital; it is also true that the credibility of a source must be validated, to establish believability.

 

I am John T Koraska, MSgt, USAF, Retired (age 71). While in the service (1954 – 1974), I was a Communications Intelligence Analyst/Reporter.  Although paid by the USAF, most of  my duties were under the operational control of the National Security Agency (NSA). I held clearances of Top Secret, Cryptographic, and was indoctrinated for Codeword (Special Intelligence) with access to compartmented information (projects and intelligence). Much of my career was spent overseas in places that were not tourist attractions (Libya, Turkey, Shemya, Alaska and Vietnam).

 

Training received in the Air Force and at the National Security Agency provided opportunities to develop an ability to analyze complex situations and systems to create logical intelligence products. All available sources of information were analyzed to develop possible/probable scenarios of ongoing military activities (especially within the former USSR). 

 

I have used this analytical ability (acquired at taxpayer expense), to research and analyze US government tax and welfare programs, policies and enabling legal statutes. In recent years my focus has been to discover how and why the most powerful country in history has transformed itself from creditor to debtor status. Specifically, I wanted to understand the basis for the conundrum of multi-trillion dollar explosion in federal fiscal exposures while business profits were enjoying double digit increases and employment is at historic high levels.

 

 The research has been an educational experience. In Nov. 2004 a website http://www.debtism.com was established to publish articles on the internet. The first article The Legacy of Perpetual Debt was published on Feb. 4, 2005. Each succeeding article has been an improvement since additional investigation developed new insights.  

 

Additionally, “letters to the editor” have been published on the Op-Ed Page of the Tyler Morning Telegraph (Note: Click search archives for John Koraska and scroll to the title) of the following articles:

 

Truth of American Debt   09/28/07

 

Tarnish Spreads On 'American Dream' 05/04/07

 

Saving Social Security 10/10/06

 

POLITICIANS MAKING SS FAILURE PROBABLE 09/06/06

 

CALLING ON SANITY TO STOP 'GUEST WORKERS'  5/26/06

 

Numerous articles with a primary focus on Social Security and secondary focus on the US Economy have been published on the debtism website. On September 11, 2006 a Free E-Book Getting Ready for Hard Times was published; that summarized issues raised in previous articles.  Articles have also been posted on internet message boards. Following are a few responses: 

 

  SargeK, you represent a lost generation of honest Americans.

 

Getting Ready for Hard Times is a free E-Book that warns of impending economic catastrophe. It documents specific defects in tax and welfare law that has converted the USA from Creditor to Debtor nation. It specifically recommends citizens file class action lawsuits against the government to repeal certain laws that appear to be unconstitutional.

 

 

This is an amazing e-book  Getting Ready for Hard Times , full of facts and history. I'm working my way slowly through it.

 

The guy who created the following linked website http://debtism.com/ has done the most complete analysis I've read on the US debt and it's implications to SS and Medicare etc. I highly recommend reading every article on the site. It's empowering. ...He is an old time poster on Silicon Investor that took it upon himself to do the work, for the sake of us all.

http://www1.investorvillage.com/smbd.asp?mb=2234&pt=msg&mn=16185   

 

It's hard to motivate baby boomers who are comfortable and lazy, to look beyond their own needs for the greater good.  Thank you Sarge for all the hard work.

John, I read all your site. Thank you for your analysis. It is very thoughtful and reliable. As an Israeli, I have to say that Israel is situated in even worse situation... http://www1.investorvillage.com/viewprivatemsg.asp?mid=5AA65B0F608E0F31&f 

 

PrudentBear.com Chat Forum:  

 

Thanks, I massed e-mailed the E-Book.

Everyone school kid in America should be forced to learn that debt is a road towards to slavery.  I'm toying with the idea of bringing this E-Book to the local High School.

Yeah, I'm thinking of passing it on to my closest friends, just to ease my conscience that I kinda know what ultimately will happen. And to do it when the market is making new all time highs, should get a few of them to just laugh me off the planet. But, I think I might just buy myself some more Golden Eagles before I pass it on. http://www.prudentbears.com/

 

Silicon Investor:
SargeK nice work and very, very interesting.
You have done some outstanding research. You guys must be real deep thinkers. Far deeper than  I am capable of going.>> Brilliant, SargeK! http://www.siliconinvestor.com/readmsg.aspx?msgid=22880888

 

Godlike Productions:

snip
>What it boils down to is the government has developed a statutory, but constitutionally questionable means, whereby they can pick the pockets of taxpayers without them realizing that theft has occurred. WOW!

snip
>Survival requires an examination by each household to determine the extent of their financial dependency on government promises of entitlements. Individuals must become responsible for funding their anticipated future requirements with little reliance on government assurance. Government generosity should be viewed as a bonus beyond those assets held under personal control that may satisfy projected needs.<  Quoting: Shadow

 

Like it states above, "Government generosity should be viewed as a bonus beyond those assets held under personal control that may satisfy projected needs."  Quoting: F.B. Nyte 144284

This should be put on it's own thread and pinned!

 

Surprisingly, there have been NO rebuttals of facts presented nor have there been any effective challenges to the accuracy of interpretation on issues discussed in published articles. Neither the editorial staff of the Tyler Paper (which is understandably reluctant to publish such controversial issues) nor its readers have challenged accuracy of stated fact or opinion. 

 

UNITED WE STAND

 

John Koraska aka "SargeK"