The bottom line on USA Inc.? Cash flow and net worth are negative, profits are rare, and off-balance-sheet liabilities are enormous. The “company” has underinvested in productive capital, education, and technology—the very tools needed to compete in the global marketplace. Lenders have been patient so far, but the sky-high rates on the sovereign debt of Greece, Ireland, and Portugal suggest what might lie ahead for USA Inc. shareholders and our children.

By our rough estimate, USA Inc. has a net worth of negative $44 trillion. That comes to $143,000 per capita. Negative.

To be fair, the net worth calculation leaves out some assets, including, most importantly, the power to tax. Which simply means that the government can improve its own finances by worsening those of its citizen-shareholders.

The government is operating in a market economy. This by definition is a capitalistic process. In a market economy, these losses would have ensured that this company no longer existed.

A company can only thrive in a market economy when it provides goods and services that consumers value: they indicate this value through their exchange of goods/services, expressed in money, for the goods/services being supplied.

Ignoring all detail, that the Company USA, is losing money hand-over-fist, requires that it be wound up. That it can only keep going through theft [taxation] and increasing those depredations, is the strongest argument for winding it up.

Medicare and Medicaid are the crushers for USA Inc. Excluding them and one-time charges, the “core business” shows a median net profit margin of 4 percent over the past 15 years. USA Inc.’s core operations were in surplus nine of those years. In the early years of the Republic, the only entitlements were military pensions. The big change came with the 1930s and World War II, when the federal government substantially expanded its role in the economy (in effect, its “business lines”).

Which of course was the abomination known as “The New Deal” under Roosevelt. A move away from the market economy, to one that modeled itself on a totalitarian socialistic model.

Why are Medicare and Medicaid so bad? Partly due to the cartel that has been formed for the pharmaceutical companies through government. When market competition is curtailed by law, the result are spiraling costs to the consumer.

Entitlements experienced a surge in the Great Society of the 1960s. Since 1965, the nation’s gross domestic product has increased about 2.7 times over, but entitlement expenses have increased 11.1 times over. What do Americans have to show for it? Evidence suggests that when the government provides, families do less for themselves: There is an 82 percent correlation between rising entitlement spending and falling personal savings rates. With the aging of my baby boom generation, things will get even worse.

The Welfare State. England’s experiment with the first welfare state ended so badly, that to balance the books, the Workhouse had to be introduced. This was to separate the truly lazy from the truly needy. There is no human right to ease: there is only the right to own your own property. The Social Contact, Social Democracy, are simply redistribution away from the productive, to the non-productive. Under that basis, is it any surprise that wealth is being consumed?

Let me share one statistic that shocked me, from the Long-Term Budget Outlook published last year by the nonpartisan Congressional Budget Office. If current trends continue, the CBO says, entitlement spending and net interest payments combined will equal all of federal revenue by 2025, just 14 years from now. (This is based on the CBO’s alternative fiscal scenario, which assumes extension of the Bush tax cuts and other actions, such as a gradual increase in Medicare payment rates to physicians, that are widely expected to occur.) Back in 1999, the crossover point was not supposed to happen until 2060.

Parasites will bleed the host to death. Loss of the parasites, is no loss at all.

Imagine: no Army, Navy, Air Force, Marine Corps, or Coast Guard, no federal courts or prisons, no National Park Service, no Food & Drug Administration, no embassies, no salaries for Congress. That’s what it would take to balance the budget by 2025 and still pay interest on America’s debts, without either raising revenue or reducing entitlement growth. That’s certainly not a recognizable America.

And it sounds like an excellent idea. Because of course, the free market can provide all these services if they are demanded by consumers, Courts, Police, Prisons, etc. This has always been the basis of the Social Contract: protection by a Sovereign, from the outside depredations of another Sovereign. Substitute a purely defensive armed forces for the current offensive model, and see costs fall, with productivity rising.