If you’re a US citizen, right now you’re saddled with close to $56,000 of debt that you didn’t choose to take out, that you can’t walk away from and that has to be paid back someday at a cost that could ruin this country. That debt is close to double the average wage. It’s the cost of an imported luxury car or the deposit on a small apartment in the most expensive cities in America. And it was run up on your behalf by the federal government.
Today America owes $17.75 trillion. That’s a 17 with twelve more digits over it. Put it on a digital timer and it’s increasing so fast the last four figures are a blur and the fifth ticks over in less than a second – at ten thousand dollars a time. If we could freeze it now, and start paying it back, we’d need to hand out every single cent of US tax revenue for the next six years – and that’s if our creditors are nice enough to forget about the interest, which of course they won’t. Right now we can, despite being the richest nation on Earth, we struggle to service the debt – that alone is close to $500 billion annually, not far off what we spend on our military. Unless something changes radically it’s never going to be paid off. If the USA was a person the bounty hunters would be after us.
A friend of mine runs a website that sells gold coins & bullion. Although they are not as busy as they were during rebound from the economic crisis of 2008, he tells me there has been a steady stream of people moving money into precious metals to simply hedge against inflation and this unprecedented printing of money. This, coupled with a general consensus that something in the financial system seems fishy leads most to believe that the average Joe is concerned about this debt but is unsure what his next step is.
No president in living memory has been innocent when it comes to borrowing money we can’t pay back, but in the last few years it’s spiraled out of control. When Ronald Reagan left office we owed less than $3 trillion. Even a decade of Bush Sr. and Bill Clinton didn’t manage to double that. Over the last few years, however, Washington’s financial incontinence has reached breathtaking levels. When Barack Obama came to power the debt stood at just over $10 trillion. In just six years it’s ballooned by more than 75 percent. At that rate it will have doubled – at least – by the time he finally goes, and what happens then is all down to whoever replaces him. Depending on how many people are addicted to entitlement spending that could be Hillary Clinton, and that would be enough to finish us off – because entitlement spending is a time bomb that’s just waiting to blow up in all our faces.
The Government Accountability Office, like its name says, has the toughest job in the world – keeping our government accountable. It seems to be shouting at the wind right now, but at least it’s making the effort; in 2011 it released a report showing that the US economy is on a trajectory that’s completely unsustainable. If we keep on the way we’re going entitlement spending – Medicare, Medicaid and Social Security – is going to take up the government’s entire revenue sometime in the 2030s.
When that happens the USA is over. Done. Finished. Every penny the treasury collects in tax will go right back out the door in handouts, and we won’t even be able to think about paying the interest. When that happens the feds can either print more money to try to bail us out, or throw up its hands and quit. If they try the first path it can only stave off the second for a few more months anyway, and then we’ll be broke. Then what happens? The same as happens if you can’t pay your mortgage and credit card bills – the bailiffs come round to take all your possessions and the bank sells your house. Imagine that happening on a national scale – our nation. If we don’t end this disastrous spending spree right now then everything we’ve built since the War of Independence will end up being sold off at fire sale prices to China, Europe and Japan.