Monday, March 21, 2011
"...if we continue to add to our debt at this pace it will make our eventual collapse much worse."
An ancient proverb that is oft-repeated even in our time is that you will always end up reaping what you sow. Well, the U.S. government has been sowing seeds of debt for decades and our politicians have endlessly attempted to assure us that everything is going to be just fine. Well, everything is not going to be just fine. The truth is that the U.S. government is literally drowning in debt. Right now, the total debt of the U.S. government is $14,223,730,274,180.80. It is a debt that is so large that it defies comprehension. It is also a debt that is absolutely impossible to pay off under our current financial system. Someday the weight of this debt will completely collapse our entire economy. The only thing that is keeping that from happening already is our ability to borrow even more money.
For the moment, the U.S. government is still able to borrow gigantic sums of money at extremely low interest rates. That makes it possible for us to be able to rack up amazingly large budget deficits. For example, the Obama administration is projecting that the federal budget deficit for this fiscal year will be an all-time record 1.65 trillion dollars.
All of this borrowing is enabling the U.S. economy to maintain a false level of prosperity at least for now. But we are working with borrowed time. The U.S. government will borrow about 43 percent of what it spends this year. That cannot continue indefinitely.
A small minority of our politicians in Washington D.C. want to get this debt under control, but the truth is that it would not be easy to do even if there was the political will in Washington D.C. to do it. If we wanted to balance the federal budget today we would have to eliminate 43 percent of federal spending.
Doing that would absolutely collapse not only the U.S. economy, but the entire global economy as well.
But if we continue to add to our debt at this pace it will make our eventual collapse much worse.
We really are caught between a rock and a hard place.
Our choices are massive economic pain now or even worse economic pain later.
At this point, it appears completely impossible that we will ever have a balanced budget again under the current system.
The White House Office of Management and Budget is now projecting that mandatory federal spending (mostly for entitlements) will exceed the total of all federal revenues in this fiscal year. Back in 2008, the federal government warned us that this could happen 50 years from now. Instead, it is happening right now.
Do you understand what that means? It means that if we wiped out all discretionary federal spending (including the entire Department of Defense) we would still have a federal budget deficit.
Yes, the U.S. government really is drowning in debt.
Running a 1.65 trillion dollar budget deficit is national financial suicide.
Most Americans cannot even conceive of how much money a trillion dollars is.
If you were alive when Jesus was born and you spent one million dollars every single day since then, you still would not have spent one trillion dollars by now.
That is how hard it is to spend a trillion dollars.
If you went out today and started spending one dollar every single second, it would take you over 31,000 years to spend one trillion dollars.
Unless the United States resorts to some Zimbabwe-style money printing, the truth is that there simply is not enough money in existence to pay off the U.S. national debt even if we wanted to.
If the federal government began right at this moment to repay the U.S. national debt at a rate of one dollar per second, it would take over 440,000 years to pay off the national debt.
Are you starting to get an idea of how much trouble we are in?