Stone Cold Facts II

Here are the facts. Your political persuasions make no difference. These are the problems that confront this nation.

Our nation is in debt to the tune of 13.9 Trillion Dollars.

We have underfunded liabilities (such as Social Security) that are calculated at 55 Trillion Dollars.

Many of our states and municipalities are on the verge of bankruptcy. If these entities were required to abide by normal rules of accounting they would already be considered insolvent.

The problem is rapidly getting worse as the Federal Government is currently borrowing roughly 40 cents for every dollar it spends.

The individual American consumer is possibly in worse shape than his Government. The last official number I could find was 13.7 Trillion Dollars, including mortgages. Current estimates run about 16.2 Trillion Dollars.

We are rapidly approaching several historically important tipping points. Any one of these may or may not prove significant, but they frequently mark the beginning of the end for a nation.

1)The national debt is roughly equal to the nation’s Gross Domestic Product.
2)The interest on the national debt approaches 15% of Government expenditures
3)More than 50% of the individuals in a country are net beneficiaries of Governmental expenditures.

By the way, number 3 on this list is almost unavoidable as the Baby Boom approaches retirement.

We are told by economists that our structural unemployment level is now approximately 9%. That means we can’t expect the unemployment level to get much better than 9% in the foreseeable future. What this means in human terms is there are 26 million Americans who are unemployed or working less than full time because no work is available. It means that 41 million Americans are on the current equivalent of food stamps. This is the highest number in history.

Over the last 20 years, our public policies have resulted in the exportation of approximately 20 million American jobs to countries like China and India. The stable wealth creating factory jobs with good benefits that made this country the envy of the world are gone, perhaps forever.

Debt that can not be repaid will not be repaid. It is repudiated or it is inflated out of existence by a devaluation of the underlying currency. When this occurs, the unintended second order effects are often rather unpleasant. They include the rise of dictators, military coupes, world wars, civil wars, and revolutions.

At this point, fixing blame is not the issue. These problems will not be solved in one year or in ten, but we must begin to head in a different direction, both as individuals and as a country, or we face extinction.