Returning from a ten day Memorial vacation, Congress is faced with the need to raise the debt ceiling for the umpteenth time. If it wasn't for the fact that they have declared about $70 billion "not subject to the debt limit" we would have broken through this artificial promise back in February. As it is, we're very close to the real $6.020 trillion limit and about to burst through it in June like a nuclear sub coming up under a fishing boat.

To prevent this, Republicans want to raise the debt limit by another $750 billion to $6.7 trillion. At the present rate of increase, we would then be approaching this new ceiling right around the 2004 elections, putting George W. in a position similar to what his father faced when he lost the 1992 elections.

Dennis Hastert, the Republican Speaker of the House, promised to piggyback a raise to the debt limit on some popular legislation the same way the last raise was hidden in the 1997 popular Balanced Budget Act. He tried this last week with a $29 billion anti-terrorism bill everyone favored and it didn't work.

Democrats want the new debt ceiling separated from this popular bill and debated on its own merits in legislation of its own.

For once, I've got to agree with the Democrats. They, of course, are doing it for political gain and to blame Bush for fiscal irresponsibility, but the subject does need to be aired in a public forum and argued in detail.

Let's cut to the chaff and look at what's really at stake here. By now, you should know that the national debt is divided into two parts—what the government calls "Debt Held by the Public" and "Intragovernmental Holdings." What should more properly be labeled "Investor" and "Entitlement" holdings respectively.

This is the honest side of the national debt and generally the only thing politicians and their spin doctors want to talk about. It was what sparked the shutdowns of 1995-96 when Republicans insisted on a date to balance this part of the budget and it was the subject of the Balanced Budget Act of November, 1997, when Congress promised to stop borrowing new debt from investors.

For four years, we went without adding anything on this side of the debt and were even paying it down somewhat in a debt laundering operation that transferred debt from one side to the other in order to save interest. The "bond market" was restricted to immediately replacing Treasury securities as fast as they matured (see: Default, another chicken-little hoax) with some reduction in the only way possible to reduce the national debt; i.e., pay off maturing securities without replacing them.

We are again back to increasing this side of the national debt as if there's no tomorrow. Borrowing from investors has gone up $95 billion since October 1st, the beginning of the fiscal year.

The important thing to notice is that the above side of the national debt can go up and down. With April tax receipts, the government paid down $42 billion on this side, then re-borrowed most of it the next month in May. There is flexibility on this side of the debt. This is not true of the other side of the national debt.

The dishonest side of the national debt. What politicians and spin doctors do not want to talk about. It never goes down.

As you can see, this side has already gone up $117 billion since October first. And this is not unusual. It goes up every year by ever growing multiple amounts.

Ninety-two percent of this side is represented by some twenty entitlements like the two Social Security trust funds, the two Medicare trust funds, surplus gas taxes represented by the Highway trust fund, and other entitlements, even including the government's own Civil Service or Federal Employees Retirement Account, but not their Thrift Savings Plan that is a real trust fund.

The government takes all of the surplus entitlement money and spends it elsewhere. Then, pretending that they can both spend and save the same money, the government deposits "special obligation" nonmarketable Treasury bonds (invented for the occasion) in trust funds that really are not trusts. What they are is debit black hole accounts that you, your children, or grandchildren must someday redeem. When that happens, it will be double taxation plain and simple, with annual interest added to the tab as more debt.

On a small scale, this double taxation is happening right now, today, with at least three of the smaller entitlement trusts. (see: Double Taxed)

You can't help noticing that in December of 2001, the third month of the fiscal year, there was a dramatic leap to this debt.

This leap was due entirely to interest paid the various entitlements.

This interest is calculated on a five year model of the legitimate cash interest paid long term bonds on the honest "investor" side of the national debt. It generally turns out to be higher interest than investor interest and, because for years they've been taking entitlement money as fast as it comes into the Treasury, it's due almost every day of the year.

However, the Treasury doesn't immediately hand more bogus bonds to each entitlement every day. Instead, they issue "certificates of obligation" that, twice a year, are "rolled over" into nonmarketable bonds. In neither case is there any cash involved.

The December leap was do to one of these rollovers and another is due in June, this month.

That, and the continual theft of entitlement surpluses, is the real crisis facing Congress right now, today. They might be able to delay the next interest rollover until July, but they can't delay it forever and still continue their "borrowing" scam.

We would all be better off if the government stopped adding interest to entitlement debt. In fact we would be much better off if their "borrowing" house of cards simply crumbled and the national debt fell forty percent overnight—disappeared.

But this is never going to happen. The scam has worked so well that they have planned to apply it to the rest of the world through the New World Odor.

Still, there's more trouble ahead. Witness the following:

Obviously, the recession has had a devastating effect on the government's revenue. Take a close look at this chart and realize that, without some serious cutbacks, borrowing from investors is going to skyrocket at an even greater rate. Have you ever known government to cut its planned spending, even in times of war?

Naturally, Democrats are trying to blame this on the Bush administration's tax cut. But personal and self employed income taxes paid in April were for last year, calendar 2001, while much of corporate taxes were from the first quarter of this year. It's hard to believe that a three hundred dollar rebate for personal income tax could cause this drop in revenue. The bracket changes were not yet in effect.

That won't stop the Democrats and they'll get a lot of mileage out of blaming Bush for fiscal irresponsibility that few understand.

Meanwhile, the Republicans could cement the mid-term as well as the 2004 elections if they told the truth about the Social Security rip-off and took simple steps to correct it. Either cut payroll taxes or put the excess in a real trust fund as they could have done at any time just as they've done with their own Thrift Savings Account. Everybody loves a repentant sinner. This isn't going to happen either.

The next question is whether we can afford a never-ending war or whether we cannot do without such a war because the invention and production of weapons of mass destruction may very well be the last major industry to leave the country other than the fast food franchises, lottery, and casinos.

Is there any doubt where the New World Order is taking us?