Is America Headed Toward Insolvency?

Is COVID-19 and the Government Response Plunging America & Americans into Economic Ruin?

James F. Gauss

IRS Definition of Insolvency: When total liabilities exceed total assets.

Over eleven years ago, on January 3, 2009, I posted a short blog on “The Burden of Debt.”  It was right before President Obama’s first inauguration.  At that time the National Debt was $10.7 trillion and total debt as expressed in “unfunded liabilities” (the sum of all federal, state and local government debt, international, private household, business and domestic financial sectors—including federal debt to trust funds, such as Social Security and Medicare) was $53 trillion or $175,154/person.  By the end of 2015, according to Michael Hodges’ highly respected Grandfather Economic Report (the last one I could find), the total debt had risen to $70 trillion.

Where are we now? As of yesterday, according to the US National Debt Clock.org (https://www.usdebtclock.org/), the U.S. National Debt just exceeded $25 trillion or $201,724/taxpayer.  The huge increase is buoyed, of course, by unfettered government spending, the continued “War on Terror,” social welfare spending and now COVID-19 and the ill-advised shutting down of the U.S. economy coupled with trillions in “bailout” spending and political pork barrel largesse.

However, that is not the total picture.  America’s total debt has mushroomed to $147.4 trillion or $447,153/person and now exceeds Total National Assets of $144.2 trillion.  Is this sustainable?  I do not think so.

The Gross Domestic Product (GDP), or the total value of all goods and services in the U.S. for the year is currently $21.36 trillion, but thanks to the boneheaded response of politicians to COVID-19, the GDP is shrinking rapidly due to unemployment skyrocketing and businesses being shuttered and interstate and international commerce coming to a virtual standstill.  Tax revenues across the board (federal, state and local) are plummeting and politicians are scrambling to keep their “kingdoms” afloat and public services meaningful.  As a result, the U.S. Debt to GDP ratio has risen to 117.2% and continues to rise daily.  The same for the Total Debt to GDP, which is 132.5% and rising.  During the economic crisis of 2008+ many countries were economically destroyed with those levels of debt to GDP.

President Trump’s FY2020 budget of $4.7 trillion has been blown out of the water.  Official Federal spending is approaching $6.2 trillion with the worst yet to be figured into the over spending.  The Debt Clock estimates that “actual” spending figure is $6.75 trillion.  Clearly, the country and its citizens cannot afford this largely manufactured crisis.  What will be the ultimate outcome and how will Americans respond?

As of today, 33 million Americans have lost their jobs or been temporarily “furloughed.”  The US National Debt Clock site puts the “actual” number of unemployed at just over 40 million.  In January, the unemployment rate was a scant 3.6%, hovering around record lows. Four months later, at the end of April it had catapulted to a record high 14.7%.  It is feared that it will exceed Great Depression levels and rise to an incredible 25-30%.

Despite all this economic doom and gloom, the Democrats want to further their socialist agenda of economic enslavement with the announcement yesterday that they plan to push for another multi-trillion dollar “stimulus” package to bail out their failed democratic governors who mismanaged their state’s resources.  The financial and emotional burden being forced upon the American people is unconscionable and criminal and must be stopped.  The crushing weight is not only being shouldered by American families and taxpayers of today, but will crush the dreams of generations to come.

Check out my book, Revelation 18 and the Fate of America

Related links.

The Burden of Debt

America’s Financial Armageddon

America’s Financial Armageddon Re-visited

America’s National Debt–an Economic Gut Buster

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One Response to “Is America Headed Toward Insolvency?”

  1. Are Americans Gullible or Deceived? | James F. Gauss' Blog Says:

    […] A Patriotic & Christian Worldview « Is America Headed Toward Insolvency? […]

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