We hear about it all the time, especially since ours is so big and getting bigger with every tick of the clock. Debt is bad. Debt will bankrupt the U.S. Debt will steal the economic futures of our (o.k., your) children for generations to come. Bad, bad, nothing but bad. Like a misbehaving cur.
But, really, what’s not to like? After all, money is money and borrowed money feeds the bulldog the same as earned money. In fact, earning money is losing its appeal. These days, we’re learning that entitlements are much better even if we have to be force-fed to understand. Why work when you can skip down to the mailbox and pick up your Federal freebies every couple of weeks.
And since our entitlements are H-U-G-E, they require deficit spending because there aren’t enough rich people to pay the tab. It would be different if we could each have a rich person or two of our own. Kind of like a pet, only they support us. But, there’s a shortage of them right now, what with the recession and all. So, the Feds have to borrow a lot of money, not just to protect entitlements, but to make sure they keep growing. And growing. And growing.
And with every borrowed dime, the amount we owe gets bigger. The time bomb ticks louder. The tsunami of financial collapse rolls ever closer. Today, our total debt is $12,686,249,797,715. But, let’s call it $12.69, because all those gargantuan Government numbers just seem meaningless. Using our approach, by the end of this year, the debt will grow by another $1.50.
Is $14.19 in debt bad? Let’s compare it with the value of all goods and services produced by U.S. workers in 2009. That figure was $14.25. If we work for an entire year, trading all the fruits of our labors to pay down the debt, we’ll have 6 cents to spare. Of course, the economy would come to a stand still and we’d all starve to death, but the debt would be history, too.
Now we all know the debt won’t be fixed that way. In fact, under current budget forecasts through 2020, it won’t be fixed at all. According to the latest CBO analysis of the Obama budgets, by 2020 the total debt will stand at over $25. The annual interest owed on it will quadruple to about $1.60 while tax receipts for that year will be $4.56.
With interest payments alone equaling 35% of revenue, something will have to give. We’ll either default on our interest payments or just start printing money to make them. Defaulting means the debt will be called with no money to retire it. And printing money means galloping inflation, making all we’ve worked for worthless. Either way, we’ll lose our credit-worthiness, which means no more borrowing to finance our hooked-on-entitlements life style.
So, what do you say? Shall we let a tsunami of debt wash us away? Or shall we tighten our belts and work together to reverse the tide? You decide before Uncle Sam’s plans build the wave of fiscal irresponsibility so high that none can escape its reach.
See you on the left-side.