Just a few things to consider…
The US is the largest consumer in the world. The US accomplishes this through borrowing, since we don’t sell enough goods to maintain our expensive lifestyles. That debt is now reaching proportions which have never been seen in the history of man. Total US savings are at an all time low. If you owe more than you own, your net worth is negative. When the bills come due, if you can’t pay, you will be bankrupt.
Joshua Fritch has an essay which describes the situation in pretty clear terms.
Just how bad is it? As of July 7, 2005 the public debt as reported by the government is $7,838,410,800,630.51.1 This does not include private debts such as mortgages, home equity loans, car loans, “personal” loans, credit card accounts, layaway plans or any other type of personal debt. Nor does this number include corporate debt, or even your state or local government debts – – it is purely a measure of how much debt the federal government alone has taken on. Considering that this total has increased by more than $242 billion in just the first 7 months of this calendar year, I think it is safe to assume we will crack $8 trillion by the end of the year. With a population of 300 million here in the United States, this means that every man, woman and child in the country owes approximately $26,600. You owe twenty-six thousand dollars. So does your spouse. If you are married with three children, your combined household debt, courtesy of runaway government officials, is about $133,000. But let’s stick with $26,600 for now – – it’s easier to wrap your head around. Let’s say you owe $26,600 and there is no such thing as interest – – the amount owed remains static. If you decide to make payments of $100/month, it will take you roughly 22 years to pay it off. Even if you pour money on this debt at the rate of $1000/month, it will still take you more than two years to pay it off. Can you afford a $100/month increase on your taxes? How about $1000?
Perhaps you are thinking that this does not apply to you – – after all, you didn’t spend the money, so why should you have to pay it back, right? Wrong. The government has spent this money in your name, and in the name of your children. The only source of income the government has is taxes – – therefore, if the government needs to pay a debt, it will raise your taxes. But hey, they’ll only raise taxes for the rich, right? It still won’t be enough – – the combined net worth of the 25 richest Americans as of September 24, 2004 was roughly $358 billion.2 This means that if the 25 richest people in the richest country in the world cashed in everything they own and donated it towards the federal debt, it would pay off 4.57% of what we owe.
I expect that you may be skeptical of this “doomsday scenario”, but I assure you, the risks are quite real. In a world of interest-only mortgages, adjustable-rate loans and Wal-Mart Mania, it will not matter if you, personally, do not default on your debts. It will not matter if you, personally, have been fiscally responsible. Just like it only takes one bad driver to cause a 50-car pileup on the highway, the domino effect applies to our economy as well. The government and the vast majority of the United States population have been on a spending binge the likes of which the world has never seen. When the bill comes due, we all will pay. We will pay through higher taxes. We will pay because our neighbors walk away from their mortgages, causing a glut of unwanted real estate on the market leaving us unable to sell our own homes for even close to what we paid for them. We will pay for new social programs to assist the very people who caused this catastrophe when they wind up mired in bankruptcy. We will pay with the blood of our sons and daughters in the wars that always accompany the decline of an empire. We will pay.
Will you ‘pass the buck’ and wait for someone else to clean up the mess? Or will you step up and demand a stop to all of this madness by getting out of debt? That’s all it takes, you know – – to bring an end to the fiat fiscal policies we live under…stop carrying debt. You don’t need to convince the rest of the world to condemn the system, just stop participating in it yourself. Eliminate your debts to the credit card companies and the car financing corporations. Eliminate your debts to the mortgagor. Don’t buy a new TV just because you can get it on credit with “no payments or interest for one full year!” – – save up the money and buy it. You do not need to “keep up with the Joneses”, Mr. and Mrs. Jones are going to eventually suffocate under a mountain of debt – – do you really want to be one step ahead of them? Richard Russell once said there will soon be a new four letter word – – this word will be D-E-B-T.
“Were we directed from Washington when to sow, and when to reap, we should soon want bread.”
- — Thomas Jefferson, Autobiography, 1821