Average Americans know this, they are not stupid, and they have a queasy gut feeling that it is very wrong. When "The Great Recession" struck with a vengeance in 2007, Americans began tightening their belts. Indeed, we were fat — buying $4 venti hazelnut lattes using the SUV going through the drive-through at Starbucks, putting the coffee on our credit cards. I was one of these people, and we were millions strong.
We got real. We began saving again, we cut expenses, and we invested in our futures through educational pursuits, and second jobs. We learned to live on less in 2008, and even less in 2009, and still less in 2010. Income has picked up these last two years, but an analysis of where the money is going still shows a decided focus on cutting expenses and saving. It makes me proud to have witnessed this transformation in the American citizenry, and my own household. It's the same thing Americans did in the 1930s, only this time, 1929 was 2007.
We The People are getting it right. But our government isn't, and we know it.
The leadership is telling us that what is good for individuals, living within our means, is not good for the nation. This corrupt thinking delays the inevitable belt tightening that government can, will, and must undertake. Certainly times of emergency such as recession and also natural disasters require the government reach for its credit card, but it has become a day-to-day and year-to-year thing. Good times, bad times, the spending just keeps increasing.
The government no longer focuses on prioritization, but rather on tricks like passing the buck to a special, “blue-ribbon” committee … but then ignoring the recommendations of said committee. Or making a law that says, “if we can’t balance the budget by ourselves, we’ll just whack off a chunk from military and social spending.” Notice all the recent talk about cutting Social Security, when it is about the only government program to actually have a surplus — but not for long!
And the primary solution to Medicare overages, according to our congress, cut the payments to doctors. Why a college freshman with one Introduction to Economics could tell you what comes from price controls: shortages.
Just do the simple math — today, January 8th, 2013, we Americans are living beyond our means at a rate of nearly $40,000 per second. Our borrowing this year will exceed $1,000,000,000,000.00. As of this morning, our total accumulated National Debt is $16,436,647,579,068, on a total GDP of $15 trillion. Merry Christmas, America. We owe more than we make … in total.
The United States gross national debt is growing by more than $3 billion every day. Last fiscal year alone (FY2012), the debt rose more than $1.3 trillion. If you break that down, it is more than $51,679 for every single man, woman, and child in the United States.
Before I go on, just for those that don’t remember this from school, the “Deficit” is the difference between how much the Federal Government gets in revenue and how much it spends. The difference or “deficit” must be borrowed. That borrowing adds to the total owed by the US Government. That is the “Debt” or “National Debt.” It is true that, during some of the years under Clinton, the government had a surplus. That allowed paying down of the debt … slightly.
But since then, under Republican and Democrat Congresses and Republican and Democrat Presidents, we’ve spent more than we earn as a nation and the National Debt has increased … quite a bit.
It all started much before these most recent Presidents. The massive borrowing began in the early 1980s, and if memory serves correctly, every budget passed under the gavel of House Speaker Tip O'Neil (D) was signed into law by President Ronald Reagan (R). They worked together, as one, to borrow and steal – no need to beg. After all, We The People allowed it.
If you make a graph of the debt, you can see the trend started in the 80's and has continued right up to the present day. In fact, the graph is getting steeper. We are definitely headed in the wrong direction. If any one of us took this economic information to a financial planner, we would get strong advice about getting our finances under control or we're headed for bankruptcy. It is no different as a nation.
Pity the poor Romans, even at the height of their decadence. This once great civilization had to run dozens of mints across the Empire, in places like Gaul, Britannia, and Dacia, at full speed, to produce coins to fund their government excess.
The value of these coins was based upon two factors: The good name of the Emperor, whose visage appeared on the obverse, and the base metal that the coins were comprised of. It took three men to make each coin: One to hold the coin in a tong over a die, one to strike the obverse with a hammer, and when the coin was flipped, one to strike the reverse with a hammer. In this way, Rome could live wildly beyond its means, simply by producing millions of cistercians, and thousands of denari, per day.
Who needs coins? At the end of the 20th, and dawn of the 21st Centuries, the Americans simply issued trillions of dollars of I.O.U.s, called “treasury bonds,” and the world scooped them up, all on the good name and good faith of the people of the United States' ability to pay the interest on the debt. Still, not ones to let a good history lesson be ignored, the Federal printing plants have been running at full speed putting out greenbacks. This time there's no base metal value. Just the pictures of the founding fathers and presidents. This flood of money has kept the government afloat and put off any tough decisions about spending and income.
Federal borrowing on unprecedented scales accompanies wild spending, from bridges to nowhere to stealth fighters intended to defend the skies against the last enemy from the last century to million dollar junkets by representatives to beach-side resorts. Today, the interest alone on the National Debt is the nation's 5th largest line item … and that is with interest rates at such a low level that they can’t actually be reduced more. Think about what the interest bill will rise to if rates return to more normal values … and they will … eventually.
We The People know this is wrong, we feel it in our gut, and this profligate spending is being inflicted upon us by politicians from both major political parties, whether "D" or "R." Forget Sean Hannity or Rachel Maddow — these are circus barkers, and both of their parties are wholly and unmercifully corrupt, and they are as one in the mortgaging of our great nation's future.
The parties are both corrupt, their leadership is unethical, and this will not, nor cannot last. History shows us, again and again, the destructive cycle of Empire:
- Growth and prosperity
- Government largesse and increased taxation
- Incessant warfare, government borrowing and confiscation
- Increase taxation, and tax revolts (See Proposition 13, California, 1979)
- Chaos, unrest
When We The People are ready for a change, there is a better way, and we feel it in our bones.
What the great minds conceived in Philadelphia in 1776, and what we have become, are two completely different realities. The former was a dream – the current is a nightmare. I’m old. I’m grumpy. I’m tired. And I’m not seeing any change in Washington. It’s kick the can down the road. I’m not worried about me. Linda and I have a healthy nest egg and nice retirement income … at least for the present. It’s the kids and the grandkids and their kids I’m worried about. Doesn’t anyone realize that our New Year’s Eve party is going to leave a big hangover for them?
What, me worry. Got to stop reading that Declaration of Independence. I keep thinking that We The People get exactly the government we deserve. I hope the revolution will be at the ballet box.