Hard debt means formal and highly-defined borrowings
with sub-schedules for paying interest and repayment of principal, often
including negative and positive covenant-terms to protect the lender.
With hard debt, the borrower actually receives cash in the amount of the
These days, soft debt is money owed when one does not
actually receive cash. That is, debt becomes owed without receiving the
cash in one's bank account that ordinarily occurs when negotiating a hard loan
That is, soft debt is a systematic, legally-obligatory promise to
pay debt, including economically compounded interest without having
received the borrowed cash.
Examples are: Pension and healthcare obligations that are
not backed with assets—hence unfunded actuarial liabilities.
Other examples are liabilities created by non-pension laws, such as social
security, where there are no actual independent assets standing behind the
liabilities. These amount to trillions and trillions, at least several
times the gross domestic product of the United States of America.
Politicians especially, and pension and social security managers will
go to extra-ordinary deviousness to limit public knowledge about soft debt,
including getting collaborative actuaries to dramatically and officially
understate the amount of soft debt. Why? Because the soft debts are
(1) promises to pay much larger pension and healthcare payments to government
employees in return for political campaigning for favored politicians, and (2) negotiated
union dues-sourced conduits for funneling cash and "in-kind"
contributions into favored political campaigns—annually millions in local
political campaigns but billions nationally.
These arrangements are not settled
law—have not been yet been found illegal. But the question is: Will the soft debt created become prohibited
in time to save the country? That’s unlikely.
One thing seems absolutely
certain: The amounts of hard debts of
governments and government-like non-profits, combined with soft debts of the
same organizations, clearly are of such of an incredibly large total amount,
when compared to the amount of net worth of the individual jurisdictions and nation,
it’s safe to say, it will not ever be paid.
The statistical crisis (think about
the financial histories of Detroit, Stockton, and San Bernardino) has been occurring
for decades. When there is inadequate net worth of citizens to be taxed away,
the cash crisis forces economic if not legal bankruptcies. That’s when the
When and if massive bankruptcies
occur, be prepared to live alternative life styles and speak the language of your
captors who will be absolutely and totally brutal. They have been denied by America’s strong military
for two-score and ten years. If you haven’t been paying attention, the military
is reeling backward and spirally downward at incredible speeds.
Be very prepared. But first be
worthy of God’s protection and blessings. You’ll need all of it.