A National Debt Of $14 Trillion? Try $211 Trillion

Kotlikoff explains that America's "unofficial" payment obligations — like Social Security, Medicare and Medicaid benefits — jack up the debt figure substantially.

"If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That's the fiscal gap," he says. "That's our true indebtedness."

To eliminate the fiscal gap, Kotlikoff says, the U.S. would have to have tax increases and spending reductions far beyond what's being negotiated right now in Washington.

"What you have to do is either immediately and permanently raise taxes by about two-thirds, or immediately and permanently cut every dollar of spending by 40 percent forever. The [Congressional Budget Office's] numbers say we have an absolutely enormous problem facing us."
http://www.npr.org/2011/08/06/139027615/a-national-debt-of-14-trillion-try-211-trillion?ft=1&f=1001

Were coming to a point US imperial overstretch will have to be dealt with. This is not a deficit problem only dealing with having to reduce healthcare, Medicaid, medicate and so forth. As some 50% of every tax dollar today in the US goes directly in one way or the other in what can be describes as corporate welfare to the military industrial sector that then is where the significant cuts has to be taken. Even cleares as som 40% of all the cost associated to finance the current US war undertakings is taken out of the defecit.

The Geopolitical environment is changing and changing fast. New alliance is forming and question then how long before the petrodollar i dead? For how long will resource rich countries accept more and more debased $us as compensation for their e.g. oil?

In the midst of all of this one also has to remember that the US today is the world primary food producer. It produces e.g. wheat, corn, Soy that is exported all over the world.

As dependent that food production is on oil well then its fair to expect higher future prices. Add to this growing world populations and increasing food demand. Question then would be in what currency would Americans want to be paid in order to export?

Clear is that demand for corn has been soaring. Export of corn to china is expected to quadruple from here combined with a high demand for ethanol.
http://www.marketwatch.com/video/asset/markets-hub-us-corn-to-china-export-quadrupled/24B8B2D2-5897-494D-A94C-45771CC603A2#!24B8B2D2-5897-494D-A94C-45771CC603A2

The nearby chart, based on data from the Department of Agriculture, shows the remarkable trend over a decade. In 2001, only 7% of U.S. corn went for ethanol, or about 707 million bushels. By 2010, the ethanol share was 39.4%, or nearly five billion bushels out of total U.S. production of 12.45 billion bushels. Four of every 10 rows of corn now go to produce fuel for American cars or trucks, not food or feed.
http://online.wsj.com/article/SB10001424052748703396604576088010481315914.html

So there is a decision to be made here - produce food or ethanol. In any case corn prices will increase putting even more pressure on poor countries that need to import food.

Wheat is the primary food in North Africa and in the Middle East but the highest consumer per capita is in fact Denmark. But the primary use of wheat in Denmark is in fact as animal feed. Some 80% of all wheat in Denmark is used for that purpose. After China, India the US is the World’s third largest wheat producer. Clearly the unrest in the Middle East can be related to the fact whet prices have been soaring.

10-year commodity price chart for Wheat, US, HRW
http://www.mongabay.com/images/commodities/charts/wheat.html

Meanwhile the Chinese are voicing out what only can be described as significantly more aggressive signals to the US in regards of it US Treasuries holding. There clearly is a political geopolitical aspect to this as in fact the very first rating institute to downgrade the US not was S&P but in fact a Chinese rating institute.

The Chinese now clearly try to put some hard pressure on the US and in fact these Communists favors austerity. "For the people By the People"?

NEW YORK (MarketWatch) — China used Standard & Poor’s decision to downgrade the U.S. credit rating to issue a sharply-worded rebuke of the U.S. government on Saturday, saying Washington can no longer borrow its way out of trouble.
http://www.marketwatch.com/story/china-rips-us-on-debt-rating-downgrade-2011-08-06

And Russia as well is loud about their dissatisfaction with the way US manages its financial affairs. In fact Putins views the US now as nothing more than parasites.

What Did Putin Call the U.S.?
http://www.realclearworld.com/2011/08/02/what_did_putin_call_the_us_126215.html

In reality the US is under severe attack domestically as well as overseas. The US needs oil and imports some 2/3rds of all oil it consumes. The world need food and the US here really is a key player internationally. Just imagine what would happen if that US supply for some reason would not make it to the markets?

Are we beginning to see a new food for oil rather than dollar approach as part of the future US strategy? I do think however that militarily the US will have but limited ability to secure its interest internationally and combine then this with a less and less attractive dollar trade and its clear foods important as a geopolitical weapon will increase.

Problem with food, in the way food production today is structured and organized, is that in all aspects its totally dependent on the availability of oil. On average it takes some 10 calories of energy to get one energy calorie on your plate.