As a nation, we are so far in debt that the chances of us every reducing it to the point that it can be reasonably managed, much less paid off, are slim to none. Everyone can check the National Debt Clock on the internet and see it spinning wildly upward from its already lofty perch of over $15.5 trillion. We can be told that in the last four years alone it has increased $6 trillion and is projected to soon speed by the $20 trillion plateau once the full impact of Obamacare clicks in. The problem is that most people’s eyes just glaze over when they hear such facts. Most of us have no concept of just how much money even $1 trillion is and even if we did get some feeling for that sum of money, it’s amazing how many people think that the government will take care of things. After all, can’t they just print all the money they need?
Now some people may need to be hit over the head with a hammer loaded with financial reality. The citizens of the United Sates are The Nation and the National Debt is our debt. As a citizen of the U.S., each of us presently owes the creditors of our nation roughly $50,000. That means that the typical family of four is responsible for a debt of approximately $200,000. How many of the nation’s families could manage a debt of this magnitude, and the story gets worse. Only about 50% of the citizens of our country pay taxes, so you could say that every tax paying family of four needs to fit paying interest on a $400,000 debt into their budgets. At 5% interest, that’s payments of $20,000/ year. One other thing, this debt is increasing every second (take a look at the National Debt Clock). Are we headed for financial disaster?
You may be wondering why the government just doesn’t print a whole pile of money and pay off the debt. They certainly can print money fast and may even be able to print it faster that the Debt Clock is advancing. However, for every new dollar that they inject into the economy all existing dollars loose a bit of value. That’s known as inflation and a large influx of new dollars would set off rampant inflation so all of our financial resources would be worth far less. The cost of everything would go through the roof. Additionally, creditors would demand markedly increased interest rates on new debt. Printing money is not a realistic solution for our debt problem. While “so called” quantitative easing (printing money) may give the illusion of temporary relief, in reality it is a deadly trap.
So, what can we do? Our government continues to function in the red, i.e., run a budget deficit. They spend more than they take in so our debt just continues to increase. While some politicians make feeble sounds about reducing the deficit, they need to be shouting at the top of their lungs, warning us of the Mega-Quake Debt already upon us. I have to admit that regardless of which politicians are in power, I have little confidence that they will, or even have the ability, to save us from a serious financial meltdown. I recommend reading the New York Times Bestseller “Aftershock” by the authors (David Wiedemer, Ph.D., Robert A. Wiedemer and Cindy Spitzer) who accurately predicted the initial wave of financial misery (bursting of the housing bubble, rising unemployment, etc.) that we have recently experienced. Their latest predictions are certainly ominous and we can only hope that they are wrong. Additionally, by reading the accounts of the difficulties currently being faced by Greece and a number of other European countries, you may gain important insight on what to expect in the future and how best to protect yourself and your families.
