• Stephen Paluga

Calculating Labor Costs with an Overlapping Generations Model

Updated: Feb 23

I believe overlapping Generations of politically motivated Governments may have either deliberately or accidentally constructed a complex Unified Budget System that hides mathematical mistakes and perpetuates unsustainable promises made to overlapping generations of citizens. Government funds are being mis-labeled as “assets” when they are, in fact, liabilities, and associated interest is being mis-labeled as “interest income” when it is actually a compounding interest expense. Furthermore, budgetary costs are being mis-labeled as “interest expense,” which not only lacks transparency, but if the worst-case scenario is occurring, also presents the possibility that Government liabilities are being reduced by a discount factor that is actually working in the opposite direction of a normal discounting process and results in a hidden compounding interest loop that will go exponential. Should my concerns be valid, as I know they are with an unwavering conviction that only mathematics can provide, Americans are going to receive a preventable lesson in the destructive capabilities of compounding debt and we are facing a severe financial reckoning. I am not afraid of being wrong, I am terrified of being right. If the Government’s Unified Budget is deliberately or accidentally hiding unsustainable structures embedded in the Office of Personnel Management Pension System, Military Pension System, Social Security Pension System, and Medicare Healthcare System, our darkest hour is still before us.

Overlapping Generations Model Paper
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