Posted on 01/23/2023 6:14:17 AM PST by Red Badger
You can call everyone for dinner, because our goose is cooked. We are so deep in debt that the only way we can keep the entire system from collapsing is to keep borrowing even more money. Perhaps you have been through a similar scenario with your own personal finances. When you simply do not have enough money to pay your bills, borrowing more money can seem like a really easy short-term solution. Unfortunately, the U.S. government has been doing this for decades, and now our national debt spiral has reached a terminal stage.
Even if we gathered up all of the money that exists in every bank account in America, we could not pay off the national debt. The debt level is exploding upwards at an exponential rate, and the only way that the federal government can continue to pay the bills is to keep borrowing and spending colossal mountains of money that we must borrow from someone else.
As I write this article, the U.S. national debt is sitting at 31.4 trillion dollars.
But the total value of all goods and services produced in the United States last year was only about 25 trillion dollars.
Our leaders in Washington could try to reverse course by balancing the budget, but that would lead to a short-term economic disaster.
Just think about it. What do you think would happen if a couple trillion dollars of government spending was suddenly sucked out of the economy?
We would immediately plunge into a horrifying economic depression. Sadly, the truth is that we have been borrowing from the future to make the present a lot more pleasant. We are enjoying an artificially-inflated standard of living that we do not deserve, and we have been using debt to fund that artificially-inflated standard of living.
But now a day of reckoning is here. Of course it isn’t just the federal government that has gone completely insane. Our state and local governments are collectively more than 3 trillion dollars in debt. Corporate debt in the United States has now surpassed the 12 trillion dollar mark.
And total U.S. household debt is now over 18 trillion dollars.
As the U.S. economy has slowed down in recent months, an increasing number of Americans have turned to credit card debt. So now credit card debt is rising at an exponential rate while the savings rate has dropped to a historic low. And at this point the average rate of interest on credit card balances is the highest ever.
I don’t even have the words to describe how self-destructive we are being. On every level of society, debt levels are absolutely skyrocketing.
We are literally committing national financial suicide, but many people don’t seem to care. And many people don’t seem to care because they don’t even understand what is happening.
At this point, our “system of education” has produced hordes of completely clueless individuals that can barely even function in a modern society.
If we had a population that was properly educated and properly informed, they would be absolutely horrified by what our leaders have been doing to us.
But instead, our leaders have been free to systematically destroy our financial future for a very long time, and very few of us have even cared enough to object.
Unfortunately, we have reached a point where there is no turning back. We have already destroyed the reserve currency of the planet. We have already created rampant inflation.
The Federal Reserve has been feverishly hiking interest rates, but that is dramatically raising debt service costs at every level of our society, and it is also causing economic activity to slow down all around us.
Companies all over America are now laying off workers, and that even includes Google…
On Friday, Alphabet-owned Google announced it was cutting 12,000 employees, roughly 6% of the full-time workforce. While employees had been bracing for a potential layoff, they are questioning leadership about the criteria for layoffs which surprised some employees, who woke up to find their access to company properties cut off. Some of the laid-off employees had been long-tenured or recently promoted, raising questions about the criteria used to decide whose jobs were cut.
Shortly after CEO Sundar Pichai’s initial email to employees Friday morning, Google’s search boss Prabhakar Raghavan sent an email to employees saying he “also feels the responsibility to reach out” and asking for them to save questions for next week’s town hall. There will be “bumps in the road” as the organization moves forward with the layoffs, Raghavan noted.
Why is Google doing this?
No corporation in the entire country is stronger than they are.
If there is one company in America that should not be laying off workers, it is Google.
Of course just about every large tech company is laying off workers these days.
Microsoft is laying off workers. Amazon is laying off workers. Facebook is laying off workers. Twitter is laying off workers.
We haven’t seen anything like this since 2008, and that is because we haven’t had an economic crisis like this since 2008.
So many people are going to lose their jobs in the months ahead.
And the economic pain that we will experience in 2023 will be just the beginning, because the entire system is starting to come down all around us.
Did you actually think that we could go on the greatest debt binge in all of human history and that everything would work out just fine somehow?
That is not how the real world works.
We sat by and did nothing while our leaders made disastrous decisions for decades, and now we will be forced to watch in horror as the consequences of those decisions play out right in front of our eyes.
“The validity of the public debt of the United States, authorized by law,...shall not be questioned.”
I’m not sure if interest will validly accrue after a default since it may not be authorized by law.
There’s no constitutional requirement that the debt be timely paid. Many Americans have valid debt that is not being paid.
A lot depends on what the money is spent on.
In WWII the debt recapitalized American manufacturers who also introduced a lot of new capital equipment which helped give us decades of growth.
Alexander Hamilton realized this in the 18th century, after seeing how Britain's colossal expenditures in the Seven Years War greatly expanded its economy. That's why he wanted the US to establish its credit by taking on the states' Revolutionary War debt.
The problem is that almost all of our current debt is subsidizing current consumption and Wall Street speculation and much of its bleeds out through the trade deficit. So we are borrowing money to make China and our greedy, dictatorial upper class richer.
The Federal Reserve can always conjure up the cash electronically, so we will never be insolvent.
However we are long past the point where the debt can be repaid in honest funds that have at least the buying power of the funds actually borrowed.
The federal government has to cheat the people and governments it borrows from out of generally increasing percentages of the value of their money lent out.
When people and governments are cheated out of trillions of dollars of buying power there are likely to be severe consequences.
That advice is usually good but not appicable when debt is made cheaper than the costs of true inflation.
Then the government sends me a chunk of money for no good reason and for doing absolutely nothing? Sure, I guess I could have sent it back on principle, but for what, so that the government could then use it to pay for some convicted murderer's sex change or some stupid study on the effects of adding raisins to the diet of sea gulls? So I stuck the money I didn't need into a savings account.
When the U.S. debt hit just one trillion some time back, I remember all the doomsayers saying that this was the end, that there was no way we would ever pay all that money off. Remember that? That was back around 1981 just after Reagan took office.
I bet you we hit $100 trillion within the next twenty years. At some point, the house of cards must fall so the doomsayers will eventually be correct.
Now if the U.S. is forced to default on their debt, the effect will be felt by the citizens in terms of skyrocketing interest rates (on debt), stock market crashes and whatnot. Those who depend on government money for their existence (Welfare, SSA, etc.) are totally screwed.
The politicians are just kicking the can down the road as much as they can, so tough decisions do not have to be made on their watch. They are playing a game of musical chairs, hoping they are not the ones without a chair when the music stops.
I understand that Hamilton’s New York speculator friends bought up the debt cheap and he convinced Americans to pay face value on it.
Now we owe $31 trillion.
In 1913 the income tax came into effect because farmers and others wanted lower tariffs. In 1914 WWI started and imports were no longer readily available from much of Europe.
“Just think about it. What do you think would happen if a couple trillion dollars of government spending was suddenly sucked out of the economy?”
It isn’t necessary to suddenly suck trillions of dollars out of the economy. Rand Paul has spoken a number of times about a simple plan to balance the budget. Simply hold spending at the current level for 5 years. No reductions.
How do we do this? Simply set a cap on spending then during the next five years end programs which can be better done in the private sector or by the states. Much of federal spending, if cut, would be taken on by the private sector or state and local government. For example, end subsidies to PBS, essentially privatizing it. PBS will sell advertising to fund its operations as well as end wasteful activities that exist only because the network is government funded.
The government spends $200 million per year on the “Do Not Call Registry”. End it tomorrow since it is doing nothing to stop scam phone calls.
Shut down the Department of Education. The worthwhile programs will be assumed by the states, local governments, or private foundations. Those that are not, will end. Eliminate federal funding of student loans. Let the private sector take on college lending.
End agricultural subsidies. Farm work employs only 1.6% of the population. Even if all farms that cannot make it without subsidies immediately suspended production the impact on employment would be a small fraction of the 1.6%. Unlike the doom and gloom crowd I have faith in the ingenuity of Americans when faced with hardship. Farmers who have relied on subsidies to sustain operations will shift to other crops or sell their land to other farmers who have learned to prosper without subsidies.
End block grants to states. Let the states determine if the activities funded by these grants are worthwhile. If so they will fund the programs, if not they will end them.
End grants, research studies, and consulting projects given to non-profit organizations. Let them compete in the private sector for philanthropic dollars or die if they can’t find benefactors. Planned Parenthood won’t go away if the federal government’s annual subsidy is terminated. They’ll raise the money from the Gates Foundation, George Soros, Ford Foundation, or some other private sector source.
Consider the $100 billion plus we have sent Ukraine over the past year. Not spending this money would not cripple the US economy. The EU has an economy nearly the size of the US and the Russia/Ukraine war is a European issue. Let the European countries deal with it militarily, economically, and diplomatically.
We can also save significant government spending, with no negative impact on the citizens of the US, by completing the southern border wall and ending the wave of illegal migrants consuming billions in social services as well as the criminal activity associated with the open border. The savings will far outweigh the $10-$20 billion required to seal the border.
The above are some quick examples. Give ten average citizens the federal budget and a week to make cuts and they’ll make the numbers work. States with balanced budget requirements in their constitutions do it every year.
Short term pain or not, it is long past time to take on the task.
“Alexander Hamilton realized this in the 18th century, after seeing how Britain’s colossal expenditures in the Seven Years War greatly expanded its economy.”
Too bad they lost 13 American colonies and a Revolutionary War. At least they got the ability to make more muskets and cannon.
” British report in 1781 puts their total Army deaths at 6,046 in North America (1775–1779).”
worth a read:
https://en.wikipedia.org/wiki/American_Revolutionary_War
This is the SENTIMENT, the "WE ARE DOOMED" variant.
The real threat is not debt. The real threat is election rigging.
If we unite to fight and win to secure our elections, then we can unite to fix our country.
With secure elections, we can put Donald Trump back in office. Here's an example how President Trump can fix our country and make it great again:
I. THE PROBLEM: The NWO China Model Global Reset effects are:
THE ABOVE AMERICAN LIST IS NOT REALIZABLE UNTIL THE ELECTION SYSTEM IS INVESTIGATED AND FRAUD PERPETRATORS ARE BROUGHT TO JUSTICE. THEREFORE, PROPOSED AMERICAN SOLUTIONS ARE SECONDARY TO ELECTION REFORM.
“doing nothing to stop scam phone calls”
Phones might be made that would ask what your name is if the calling number is not in the contact list or outgoing call list. Apple would be able to sell lots of new iPhones if they implemented this.
We are at the point were they no longer have to rig elections.
We have to cut down on the number of federal handout recipients.
It is foolish to pay thousands of dollars a month in rent for a non-employed household in NYC or San Francisco.
EMTALA abuse is paid for under Medicare.
We can cut Medicare costs by cutting EMTALA abuse.
Allow hospitals to get $100 upfront starting in 2024.
Allow hospitals to get $200 upfront starting in 2025.
The Bling Pawnshop is open 24/7/365.
Can’t the Treasury just mint a $10 Trillion or $100 Trillion coin and we would be all set! Good times again! /sarc
“Gold standard Amendment”
There will be lots of EVs with expensive battery metals if Biden gets his way.
It is assured that 14,4.1 will be tested as words are and remain words, while numbers are a reality that evades words in many instances.
The sentence you construct is most interesting. "Many Americans have valid debt that is not being paid." If this is true then what is the definition of the word "valid." Debt not being paid is what exactly? The perpetual bond seems a possible answer, but even the bond requires some kind of payment of the interest.
We would disagree on this, for if I had lent you money and you were not paying it back, legal action would ensue. Shoe on the other foot, you would be most unhappy that I was not repaying you a loan you made to me.
Definitely not an economist but how can 31 trillion benefit anything. How is this paid.
“Compulsory 2-year military service”
President Harris won’t lack for combatants to oppress the American people.
I suspect that $1000 and $10000 coins would match outstanding debt denominations fairly well.
With INFLATED DOLLARS.
The Congress (R+D) are intentionally driving INFLATION UP!
For the sole purpose of paying off foreign debt (and domestic) with worthless dollars.
Meanwhile senior citizens (me) life savings becomes worthless as well. But the Pols do not care because the seniors will die off and their heirs will have their own problems to take care of.
They do it every time their SPENDING get them into a bind.
Rinse. Lather. Repeat as necessary....................
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.