Posts Tagged ‘Personal Debt’

America’s Financial Armageddon Re-visited

November 21, 2012

After about seven months, it is time to re-visit the nation’s financial condition.  For comparison you can visit my post of April 19, 2012 here.

According to www.usdebtclock.org, as of today the U.S. national debt has risen 3.86% since April 19 to $16.278 trillion or 105.18% of GDP (Gross Domestic Product) of $15.476 trillion. To look at it more personally, you as a U.S. citizen now “own” $51,707 of that debt or if you are a dutiful taxpayer, your share is $141,859.  Let’s hope Uncle Sam does not decide to call in his “chips” to settle his accounts.  With the fiscally irresponsible (no budget in the previous four years in office) Obama re-elected we can expect yearly trillion-dollar budget deficits as federal spending skyrockets out of control, which will greatly exacerbate the national debt problem.

How does the United States debt to GDP ratio compare with other countries?  Let’s take a look.

  • China = 11.13%
  • Brazil = 21.17%
  • Russia = 58.53%
  • Canada = 93.99%
  • U.S. = 105.18%
  • Greece = 235.15%
  • Spain = 246.93%
  • France = 292.58%
  • Britain = 504.72%
  • Ireland = 1278.8%

While the U.S. is indeed in big financial trouble, I suppose one could console oneself that we have a long way to go before becoming a Greece or (yikes!) Ireland.  But with the U.S. debt at only 105% of GDP that would be like you spending/borrowing $105 for every $100 you earned.  That does not sound like much, but if uncontrolled and not reversed it eventually adds up to bankruptcy.  Since Obama’s first inauguration, the national debt has soared 54%.  The interest alone on the national debt is currently $270 billion and if nothing significantly changes to stop this rising mushroom, the annual interest will top one trillion dollars by 2020 (just 8 years away).

In addition to the debt increase at all levels since April 19, the food stamp rolls have increased by 1.8% or by an estimated 848,845 participants to 47.7 million or 15.1% or the total U.S. population.  This is a further indication that the U.S. economy is still in deep trouble.  Interestingly, when you divide the government reported “official” unemployed of 12,169,641 + or – by the number of people in the U.S. workforce (143,565,709), you get an unemployment rate of 8.5%; not the reported 8.1% of October.  “Actual unemployment” (not reported by the government) is 15.75%.  If you take the “official” and “actual” numbers of unemployed and divide them by the number of U.S. taxpayers, the number of unemployed rises to 10.6% and 19.7%, respectively.

Another interesting observation is that the amount of savings per U.S. family dropped a dramatic 23.5% in these seven months, from $6056 to $4626.  However, this reduction in savings apparently was not used to substantially pay off personal debt, since personal debt only declined by 0.07%.  U.S. families were likely using their meager savings to help stay afloat.

Obama’s proposed tax increases on the wealthiest 1-2% is a pure smoke-screen to pacify his mindless minions who do not have a clue on how economics or the economy works.  It has been said that if Obama were to confiscate ALL of the wealth of the top 1-2% it would only keep the government solvent for 6 days.  Keep in mind that all the discussion here and elsewhere usually does not factor in the estimated trillions of unfunded dollars that Obamacare will add to government spending; the annual deficit and the national debt.

America’s Financial Armageddon

April 19, 2012

I am but a small voice in a vast wilderness of political opinion.  Although there are many far more eloquent and informed than myself who have been blowing the trumpet of warning for years, the trumpet blast continues to fall upon the deaf ears of politicians and U.S. citizens.  Truthfully, I wish there was some encouraging news I could write about when it comes to the secular world in which we live.  However, the truth is not very pleasant; not many really want to hear it or do anything about it.  But the great United States of America is rapidly advancing toward a financial Armageddon; one that the vast majority of Americans are woefully unaware and unprepared for and thus will suffer great personal consequences. (more…)

Times, They Are Not A Changing

March 3, 2010

(On April 4, 1992 our local paper published a column I wrote about the state of the United States economy.  I forgot about it until, digging through some old files, I found a copy, which I reproduce below with a few annotations.  Not surprisingly, 18 years later, the U.S. is not only in a better place but a much more dire position than I might have predicted.)

“The budget should be balanced, the treasury should be refilled, and the public debt should be reduced.  The arrogance of officialdom should be tempered and controlled.  And the assistance to foreign lands should be curtailed, lest we become bankrupt.”

Is this the quote from one of our noble politicians, a leading statesman?  One who will lead this country out of economic crisis?  No!  This is a quote from Cicero in 63 B.C., over 2,000 years ago.  [Note:  While Cicero has been given credit for the first part of the quote, the source of the entire quote is unknown.] 

What is the old adage?  “The more things change, the more they stay the same.”

Is America teetering on the edge of economic disaster? [In 2010, now more than ever.]  At a time when government and personal spending and debt is spiraling out of control, we get the same old sugar-coated pill from politicians – “everything’s OK, spend, spend, spend; nothing to worry about.”

However, there are some economists and knowledgeable people [many more now than 18 years ago] with foresight that are very concerned about the path our polticians and others are taking us down.  You only need a grade school education in math to figure out that no one, not even the great United States, can keep spending what it does not have and keep mortgaging the future of hardworking Americans, their retirement and the financial welfare of their children and grandchildren [and many generations to follow].

America and Americans have become slaves to debt and high living.  And we are about to pay the piper for our excesses.  Our national debt is nearing $4 trillion, with some estimates putting it at $20 trillion by the year 2000  With no decisive or strong commitment from the majority of our elected officials to cut spending and reduce debt, that estimate may be conservative [the officially reported national debt as of March 3, 2010 is $12.5 trillion or $40,668 for every American.  However, when entitlement obligations are added in, the debt soars to around $56 trillion.]

If this estimate is close to being accurate (and it assumes no major financial calamities, like an S & L bailout [How about a financial meltdown and hundreds of billions in bailouts to banks and other financial institutions?], then Americans would have to pay taxes exceeding 100 percent of their income in the year 2000 just to pay the interest on this debt.  [Of course this is not happening and the debt is soaring into hyperspace].  Clearly a disaster waiting to happen [and many believe is imminent].

The government that our forefathers so thoughtfully and prayerfully founded on Christian principles as a government “of the people, by the people, for the people,” is enslaving its people to debt and irresponsible management and stewardship of the constitutional trust.

It is time to clean house and elect “statesman,” not politicians, who will be morally and financially responsible.  We must insist that Congress comply with the Gramm-Rudman law of 1985 (which they never have) and maintain a balanced budget and cut expenses – NOW.

It should be against the law for the federal government to use Social Security revenues to balance the budget and, therefore, use the funds anywhere it sees fit.  Under the current accounting system, it is operating a legalized theft ring, stealing from the financial pot of millions of future [and current] retirees.  This must stop and the system be severely revamped. . . .

Politicians’ AIG Outrage Rings Hollow

March 17, 2009

I’m not sure what is more sickening, the audacity of AIG in the midst of near bankruptcy to pay out $165 million in bonuses, or the politicians in Washington falling all over themselves rushing to the podium to proclaim their outrage over such bonuses.

Where was their outrage when they were freely using taxpayer billions to bailout the mis-managed corporate money-grabbers?  Where was their outrage when they gladly accepted their automatic raises as a reward for leading this country into the worst economic crisis since the Great Depression? (more…)

Is Your Lifestyle Sustainable?

January 14, 2009

Are you one of those people who got caught up in the spending frenzy of the last few years?  Did you buy big ticket items like an SUV, a boat, a cabin, a condo, or upgrade your home to one more luxurious with money you neither had nor could afford to spend? (more…)

The Burden of Debt

January 3, 2009

I go on the principle that a public debt is a public curse.

James Madison, 1751-1836

 

Don’t be fooled by the mini stock market rally of late.  The burden of debt (personal, business, state and federal) will continue to weigh heavy on the U.S. and world markets for 2009 and the forseeable future. (more…)