In our last few blog posts, we've been discussing what Jason Hartman calls the $60 trillion time bomb, monetary inflation, asset deflation, and the mess we're in currently. Today, we're going to discuss 6 ways the government get out of this mess, as Jason Hartman theorizes it.
1. Default on Obligations
The first way the government can get out is by defaulting on their
obligations and promises. Essentially, they'd have to cut social security, medicare, medicaid, and universal healthcare because they can't afford it, and apologize. Obviously, this wouldn't go over well. However, Jason Hartman doesn't believe this scenario will happen. In a way, he thinks they're going to keep their promises.
2. Raise Taxes
The second way they can get out is by raising taxes. However, there's realistically no way they could raise taxes high enough to cover what they've promised. Unfortunately, the math just doesn't add up.
3. Sell Assets
The government could also sell some of our assets. A good example is
the controversy caused by trying to sell the Ports of Dubai. It didn't happen, however, the Bureau of Land Management can sell some of our land. We've even considered selling military equipment to Muammar Gaddafi. Toll roads are also often owned by foreign government.
The US co
uld also steal to get out of its obligations. It's possible for us to use our military to take resources from other countries. We could also use a covert method called economic hit men, which are detailed in the book “Confessions of an Economic Hit Man” by John Perkins.
5. Technological Innovation
If we could make some kind of massive step forward technologically, we could realistically
recover from the problem at hand. Some areas which have potential include biotech, nanotech, and energy innovations. This would allow us to sell innovative technology to the rest of the world to help us realistically recover.
Jason Hartman believes inflation is the way the government is going to keep its promises. $100 isn't worth as much as it was 50 or so years ago, and it might become worth even less in the future. So, the government will keep its promises, but in what's called nominal dollars. Though you'll get a social security check, it will be worth significantly less in real purchasing power. High inflation allows the government to keep its promises in terms of nominal dollars, without having much worth in terms of “real value”. However, we can use this solution to our advantage with income property investment.
The Young Wealth Team