Posted on 11/20/2010 11:17:18 AM PST by OwenKellogg
The greatest national security threat to the United States is our national debt. A determined enemy could bring us to our knees without firing a shot.
Moody's rating service indication that it is considering downgrading the debt of the U. S. Treasury from the gold standard AAA rating to a double AA rating is a warning that should not go unheeded!
Just as President Reagan helped bring down the Russian empire in a classic economic chess game in the 1980’s, the United States faces a similar risk in 2010 and beyond.
Since 1997, the national debt has climed from $5.4 Trillion to almost $12.6 Trillion as of March 11th, 2010, an increase of $7.1 Trillion. The Congress has authorized an increase in the national debt ceiling to over $14 Trillion in order to finance record budget shortfalls in the coming fiscal year.
Additionally, the White House estimates that federal debt will exceed $19 Trillion by 2015.
Household and corporate debt in the United States are increasing as well. Household debt service coverage is almost 20% of disposable income.
Corporate debt levels are equally high and troubling with some calling the leveraging of the corporate balance sheet a potential disaster.
Against the backdrop of higher corporate debt is the deleveraging of the banking industry to keep banks well capitalized as a result of staggering defaults and the mark to market accounting fiasco.
The massive federal, state, corporate and household debt creates an opportunity for an enemy of the United States to dictate our national policy and engage in a successful economic conflict with us. The enemy would merely need to stop funding our insatiable appetite for funds. By withholding funding, either costs for interest would increase or federal programs would have to be curtailed.
Unfortunately, at the very beginning of such a conflict our nation has already depleted our economic arsenals. Our country is effectively almost out of ammunition, albeit economic bullets but a weaponless arsenal just the same.
Our federal mandates are so extensive that discretionary spending cannot be curtailed sufficiently should a determined enemy wish to engage us on the field of economic battle.
Our reckless spending and the interest on the debt have the United States in a predicament. Our nation has virtually checkmated itself.
· The federal and state deficits and budget shortfalls will almost certainly cause an increase in taxes. Higher taxes will reduce consumer disposable income making consumer debt loads that much more difficult to service.
· The interest in the federal debt, even at current interest rates, consumes a larger percentage of the federal budget than at any time in history.
· The aging of America and the increasing needs for social security funding from the general fund further exacerbates an already disturbing financial trend and depletes a workforce when most needed to help with an economic recovery and to wage an economic war.
· Health care costs for an aging population are also expected to increase significantly further adversely affecting the nation’s ability to restore its financial foundation.
· The states lack financial viability to obtain sufficient funds needed to restore stability and yet face staggering costs for unfunded pension plans and health care programs
The solutions to the crisis are limited and becoming more limited as each day and billion of more debt unfolds.
To reduce the likelihood of such an economic catastrophe, our nation must act quickly to reduce spending, curtail runaway government sponsored pension plans, and make paying down the debt of the United States a national priority.
As Milton Friedman said in Capitalism and Freedom (Chicago, 1962, 75-76; 84): "Ever since the New Deal, a primary excuse for the expansion of governmental activity at the federal level has been the supposed necessity for government spending to eliminate unemployment. ... This view has been thoroughly discredited by theoretical analysis, and even more by actual experience..." Friedman concludes that the arguments deployed for fiscal stimulus are "part of economic mythology, not the demonstrated conclusions of economic analysis or quantitative studies."
Until the federal government returns to the authority defined for it in the U. S. Constitution Article 1, Section 8 and further refined in the 9th and 10th Amendments to the Constitution, we are like to be vulnerable to an economic attack.
If we act now, the decision is ours. If our nation waits, the decision is theirs.
"Until the federal government returns to the authority defined for it in the U. S. Constitution Article 1, Section 8 and further refined in the 9th and 10th Amendments to the Constitution, we are like to be vulnerable to an economic attack."
Conservatives should re-look at Article 1, Section 8 where Congress' limited powers are enumerated. Conservatives should especially hold this new Congress accountable for the 9th and 10th Amendments -- along with 1-8.
We collapsed the USSR when they could not sustain the economic costs of being a superpower. Twenty years later the USA stands at the brink.
This is why hyperinflation was chosen as our only viable option. Politicians don’t have the guts to put aside political correctness and protect us from obvious terrorist threats. So they know full well a less tangible - and explainable - economic threat would never fly in the ‘age of entitlement’ here in the U.S.
Yes, we have checkmated ourselves. But it’s a darn shame the millions of people who have done the right thing for years will wind up with all that going for naught.
I tend to agree with you. It's the only option available to our Washington elites, if they don't have the backbone to cut, cut, cut back to constitutionally permissible spending.
To make matters worse, Bernanke, the Great Depression Expert, never studied how to avoid a depression with a $13 trillion debt.
I know one way we can lower the debt, right away, we can SEIZE the 780 Billion dollars in US Treasury bonds that the NY FED is holding SEND it back to Treasury.-
That will help us cut the deficit for the next year a bit. DISAGREE?
> DISAGREE? <
I’ll have to think on that for a while, but I’m certainly intrigued about the idea.
We certainly need to settle the issue as to whether this clause is applicable:
“To provide for the Punishment of counterfeiting the Securities and current Coin of the United States”
Start with an open audit of the Fed which has enabled the tripling of the debt and the creation of numerous bubbles and busts.
That’s a good first step. Then bring our kids home and stop trying to protect the world. The world did pretty good without us as their protector. It has had its ups and downs and things got fixed. If we are going to continue down this road, the world will never stand up and protect themselves. I’m not promoting isolationism but it’s time to look to ourselves. If we don’t, we won’t be able to help anyone when the time comes. We may not be able to even protect ourselves. Socialists and communists will destroy us from the inside. We need to start standing up and be counted as Americans. Stand up for our beliefs, regardless of what the world wants us to do. We are not part of this New World Order that they want us to be.
I meant 50 countries.
I like an optimist!
I have been thinking along the same lines. We should remove forward deployed units in many countries. If anybody tries to attack us again then we should make them very uncomfortable and then make sure they take a dirt nap. Speak softly and carry a big stick, but we need to get the adults back in charge first, so it might be 2012 before we can get some defines priorities straight again...
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