Category Archives: National Debt

As both sides debate the fiscal cliff right to the very edge of disaster, “We the People” are poised to absorb the blow of Washington’s inexcusable dysfunction. On the one hand, you have Speaker Boehner who just realized he will indeed be held to account by members of his own party for his lack of fortitude and leadership of recent. On the other hand, President Obama enjoys main stream media neutrality, (and even their support), while he chips (spends) away at what’s left of our fragile economy. We are truly on the brink as a nation.

With the election now behind us, we can see the Obama second term taking shape. For the record, while I vehemently disagree with the President’s ideological stance, I do admire Mr. Obama for his political courage. He simply and truthfully pushed a radical and un-Constitutional agenda on a largely complacent electorate, grievously compromised by revisionism and a lack of historical appreciation for our beloved Republic. He seized on the political moment, took the ball down field and is preparing to go in for the touchdown. Sadly, the loser in this critical play-off game will be The United States of America. I have a sickening feeling about the consequences of being right on this one.

Nevertheless, I think it’s important for folks to understand the simple basics of what is about to happen, and in comparative terms to their own lives.

Most credible experts agree that if sequestration is allowed to go forward, and taxes are allowed to go up on all Americans, the economy will contract approximately 3.5 percent. Now as the U.S. economy itself is only growing at an anemic rate of under 2 percent, and the nation is carrying over $16 Trillion in debt with a real unemployment number of about 9 percent, this is critical. Let’s try and look at this as if it were an average middle class family today. Your monthly bills are around $4000.00, but you’re only bringing in about $2900.00 since your spouse was laid off, and her benefits have long expired. (You’re also on the short list to be laid off in the coming year because your employer will not be able to cover his “Obamacare” costs and penalties, and will have to downsize his workforce). You’re borrowing additional money to make up the difference and pay the interest on your credit. Your “projected income” over the next ten years will not keep up so you have to borrow even more money, expanding your debt profile by amounts you cannot account for without cutting your expenses, changing your spending habits “or” borrowing even more money. For the average family, this will eventually lead you to the point where no one will lend you any more money because they know you cannot possibly pay it back, (and you can’t simply print more). Are you following me?? You will now be forced to cut back in ways that you could never have imagined. Your quality of life will be dramatically altered as you may very well be forced into bankruptcy and your credit rating will be destroyed. You will likely lose your home and your car to foreclosure and/or repossession, and your wages may be garnished as debt collectors come for what little you have left. I know that you all are beginning to see this in the appropriate context. Now what the heck do you think it means for our country? What it means is this “cliff” is more like a black hole from which we may never return, but with one major difference for the federal government. They enjoy a luxury you and I do not, the power to tax until the well runs dry to correct the short-fall, ala France, Greece and Spain and their crippling tax rates.

Now we can debate all day about why both parties have politicized the argument in the manner they have, and many a short-sighted partisan fool will do just that. But it will not change the fact that our country’s economy is a mere shadow of what it was. And it certainly won’t change the fact that our elected officials at every level have screwed us to the point where they themselves have now thrown up their hands in utter frustration for lack of ideas or an appropriate and non-political solution.

Ya know, I remember reading the Erskine/Bowles report and listening to them talking about how their recommendations would be painful on all levels, and that was if we adopted those recommendations. The fact that President Obama and Congress have chosen to ignore them, leaves me to wonder if our economic wounds are now fatal.