You’ll hear people complaining that the more than $22,000,000,000,000 ($22 trillion) national debt we have can be blamed on democrats and republicans, and they would be correct, but on the other hand I don’t see liberals attempting to really do anything about it or bring it to anyone’s attention.
There is at least a group of conservative congress people who attempt to act like responsible adults.
In this instance, a number of republican lawmakers are seeking to declare our $22 trillion debt a national security threat, and there is no doubt that our debt IS a national security threat.
According to Doug McKelway, a Washington correspondent for Fox News, “Few politicians appear willing to address the hard choices that debt reduction would entail: higher taxes and less spending.”
Wow…, now that is breaking news…, NOT!
Not only do most politicians not want to talk about debt reduction, quite a few of our liberal friends are actually promoting a seemingly unlimited expansion of the national debt.
“We introduced this resolution because the United States is racing towards a fiscal cliff,” Representative Andy Biggs, a Republican from Arizona, who is sponsoring the legislation, said. “Congress is taking few measures to solve this problem, and it is beyond time for our colleagues in both chambers to become serious about balancing the nation’s budget and recognize this issue as a threat to our national security.”
According to Sally Persons of Fox News, “A similar resolution was introduced last year on the House side, but this time sponsors were able to get some support from Senate colleagues. Biggs has been working with Senator David Perdue, a republican from Georgia, and a vocal advocate for addressing the debt, who even has a debt clock in his office, on a similar resolution in the upper chamber.”
“The single greatest threat to our national security is our national debt, and it’s time Washington comes to grips with that reality,” Perdue told Fox News. “This month, our national debt topped $22 trillion. This news should have sounded alarms throughout Washington, but bureaucrats and career politicians didn’t even blink an eye.”
Senator Rand Paul, a republican from Kentucky, admonished his fellow members last year over the budget and spending increases. His opposition actually led to a short government shutdown.
“If you were against President Obama’s deficits and now you’re for the Republican deficits isn’t that the very definition of hypocrisy?” Paul said on the Senate floor last year. “Don’t you remember when Republicans howled to high heaven that President Obama was spending us into the gutter, spending us into oblivion?”
Leaders in the national security community have also made their concerns known about the massive debt. Director of National Intelligence Dan Coats listed the debt as a national security concern last year in a hearing before the Senate Intelligence Committee.
“This situation is unsustainable as I think we all know and represents a dire threat to our economic and national security,” Coats said.
“Ultimately, the debt impacts our ability to fund priorities, like providing our men and women in uniform with the resources they need to protect Americans,” Perdue said. “This debt crisis will only get worse, and if we don’t act now, our country will lose the ability to do the right thing.”
Let’s take a closer look about what we’re actually talking about here when we talk about a national debt of over $22,000,000,000,000 ($22 trillion).
Every citizen, meaning every man, woman, child or whatever you are, would have to come up with about $68,000 to pay off the national debt.
According to Chris Pandolfo of the Conservative Review:
Not every citizen pays taxes, however. Every taxpaying citizen owes approximately $166,000 towards the national debt.
The national debt is bigger than the value of everything produced in America over one year (U.S. GDP, Gross Domestic Product, = $19.3 trillion).
That means every dollar you worked for this year and everything of value produced in this country right now is not enough to meet our debt obligations.
Government estimates currently project this year’s budget deficit alone will be $693 billion, which in turn gets added to the running national debt.
To avoid default, the government needs to make interest payments on our debt. As the debt increases, the interest payments go up, too.
A complete collapse is the threat of such uncontrollable debt. And an economic collapse would mean massive cuts to government programs like Social Security, Medicare, Medicaid in a very short amount of time.
When taxes go up, social services stop, paychecks get smaller, and jobs are lost. There, you have the perfect recipe for civil unrest. This is what happened in Greece.
Our national debt increases at an average rate of $27,762.94 per second.
If it took you five minutes to read this, the debt grew by at least another $8 million in that time.
This obviously cannot last.
Eventually we will be unable to make the payments we need to make. When that happens, this country could see economic devastation that looks like Venezuela.
In his farewell address, George Washington urged the nation to “avoid … the accumulation of debt not only by shunning occasions of expense but by vigorous exertions to discharge the debts, no throwing upon posterity the burden which we ourselves ought to bear.”
It’s time to take President Washington’s advice seriously, or we all will end up suffering.
Additionally, Simon Black from the website Sovereignman.com added:
A “trillion” almost seems like a fantasy… a made-up number like “a bajillion” or “a gazillion.”
It’s a number so large that our minds don’t even have the ability to grasp the real meaning of it, because there is so little within our physical human experience that we can relate to it.
To put the number into perspective, consider that in the entire history of humanity no other nation has ever had as much debt as the United States. And yes, that fact is adjusted for inflation.
Let’s say you start spending money when Jesus was born, on the first Christmas.
You start spending $1,000,000 (1 million) every hour. Over two thousand years pass, and by a miracle, you’re still alive…, and you’re still spending $1,000,000 every hour since Jesus’ birth.
So, spending $1,000,000 X 24 hours per day X 365 days per year X 2018 years…, you’d spend $18 trillion. You’d still have spent less that the current US national debt.
Worse yet, the Treasury Department has already estimated that it will borrow another $1 trillion this fiscal year, an additional $1 trillion next year, and another trillion dollars the year after that.
Can you see the insanity?
But the scariest factor is how quickly the US national debt is growing.
On October 22, 1981, the national debt in the United States crossed the $1 trillion threshold for the first time in history.
People were rightly dismayed. It had taken nearly two centuries to reach that unfortunate milestone.
And over that time the country had been through a revolution, civil war, two world wars, the Great Depression, the nuclear arms race…, plus dozens of other conflicts, financial panics, and economic crises.
So who owns the $22 trillion of our national debt?
If you are like most people, you probably have the most concerns about the Chinese and other foreign holders of the national debt. But in reality you should be most worried about the national debt owned by the American people.
It’s a bigger number than all the foreign holders combined.
This may seem unbelievable at first, but let’s take it step-by-step and in a moment it will all make sense. We’ll start with the biggest holders of the national debt:
The second biggest holder are other branches of the US government. You may feel relieved reading this…, after all, it looks like the US government owes a huge portion of its debt to itself and could simply “erase” it if it wanted to.
But it’s important to look closer, because this is the first way of how you own a big portion of the government debt.
The vast majority of this debt is actually held by various government funds such as Social Security and retirement funds.
So…, the entitlements causing our debt own a lot of our debt? How does that work?
This is getting scary.
The US government has made the promise to take care of its citizens. To achieve this goal they put a portion of the collected tax revenue into various funds.
These funds don’t just keep the money in the bank and instead invest a portion of it into various financial instruments to grow it. One of these financial instruments is the national debt in the form of government bonds.
But the important thing to realize here is that this money belongs to the American citizens and not to the government.
And the government has the obligation to pay back that debt in order to allow the Social Security Trust Fund and other funds to fulfill their obligations to the people.
If they don’t pay it back, then it is you, the American citizen, who is on the hook for that debt.
This seems to be a “circular” nightmare that just cannot end well.
The Financial Industry:
The third biggest holder is the financial industry. These are mutual funds, banks, private pensions, insurance companies, savings bonds and so on.
This is another way of you how are exposed to and own the government debt. Even if you personally don’t own the debt, you certainly have a bank account, a 401(k) or an IRA.
And these financial institutions own government bonds purchased with your money.
Here again, we are somehow profiting from our own debt…, our own demise?
The Federal Reserve (America’s central bank):
The Federal Reserve is the fourth biggest holder. It’s the central bank of the United States and also known as “The Fed.” And although it sounds like a government entity, there is nothing “federal” about the Federal Reserve, it’s a private institution.
This private institution has control over the money supply of the United States. It establishes interest rates and has the power to conjure up money out of thin air.
This is an extraordinary power. And it has been awarded to an unelected committee of power brokers, many whom come from the investment banks.
I don’t like the sound of this already.
It works like this:
“The Fed” literally creates money out of thin air and buys government debt with it. The government uses that money to fund government operations, but in return it has to pay interest to The Fed.
Then The Fed pays out a portion of the earned interest and other profits as dividends to its shareholders, who happen to be other private banks such as JPMorgan.
Much of your income taxes are not used for roads, schools or other public services, but are spent on interest paid to The Fed…, on money it created out of nothing.
It’s a perverse system designed to transfer wealth from the American people directly to the banking elite. By continuing its unsustainable spending and debt habits, the US government is stealing from the future, your future and your children’s future.
So it is basically what we have come to expect from “the swamp.”
Other debt holders include individuals, bank trusts and estates, businesses and other investors… to the tune of over $1.6 trillion.
Included among these “other holders” of US debt is legendary investor and CEO/chairman of Berkshire Hathaway, Warren Buffett. Berkshire has over $100 billion parked in short-term Treasury bills.
State and Local Governments:
Large financial institutions, hedge funds and other investors are not alone in their holdings of US government debt.
Your state government has money invested in US government debt. And it’s likely that your local government also holds federal debt.
So, with your state and even local government holding a portion of the US national debt, you’re a creditor exposed in multiple ways to a federal government default.
The Social Security “Trust Fund” owns $2.8 trillion of our debt, roughly the same as the top 5 foreign holders of US debt.
Medicare owns another $294 billion.
Financial institutions own $3.4 trillion.
That’s a total of about $6.5 trillion and about one-sixth of the national debt. This is an even larger amount than all the foreign holders combined and makes YOU AND I the largest holders of US national debt.
Whether you like it or not, your money is exposed to the national debt and you are a holder of the US national debt in one form or another.
Nobody knows exactly when, but at some point, this whole debt bubble is going to burst.
This economic disaster will be a government default on its debt, and based on other government defaults throughout history, the situation won’t be pretty.
So, congratulations, you’re on the hook for this massive, unsustainable debt. You’re left holding the bag. You and your family are the ones who will fight for a chair when the music stops.
Do we realistically have a chance at ever paying off our national debt?
The unfortunate and short answer is…, No.
In fact, it’s MATHEMATICALLY impossible for the US to pay off its national debt.
In other words, the government could COMPLETELY CUT FUNDING for these 14 departments:
Department of State
Department of the Treasury
Department of Justice
Department of the Interior
Department of Agriculture
Department of Commerce
Department of Labor
Department of Health and Human Services
Department of Housing and Urban Development
Department of Transportation
Department of Energy
Department of Education
Department of Veterans Affairs
Department of Homeland Security
… And the government’s annual budget would still be in the red.
It’s all about the entitlement programs (programs where we get money back from our government), which account for about 60% of our annual budget.
Entitlement programs are used by politicians to “buy” votes by convincing us how compassionate they are as they dole out our own money (and our own future debt) back to us, as if they were digging into their own wallet or purse.
And now we have liberal politicians promoting the “Green New Deal,” which would make our current debt look like pocket change!
I really don’t want to scare you…, but you should be scared.
You should be very scared.
You should be scared enough to make sure you vote next time for a congressional representative, a senator or a president who is courageous enough to do what is right for our country as opposed to selling us all down the river for their own political gain.
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Thank you, MrEricksonRules.