Friday, December 30, 2011

The World In Debt - No End In Sight

Once politicians of all political parties figured out that they could borrow Trillions of Dollars, Euros, Yen etc. to pay for guns and butter to win elections, they created a world in debt like nothing ever seen in history.   Our illustrious elected representatives borrowed money to pay for wars, infrastructure, all kinds of programs and bureaucracy and entitlements.  Politicians made promises to their citizens to cover the cost of entitlements, in various versions in most countries, that they could not keep because tomorrow was never going to come.   Well guess what, tomorrow is here.  

In Europe, Spain, Italy, Portugal, France, Britain, Ireland and perhaps other countries have Sovereign Debt and entitlement obligations that are unsustainable.   The United States National Debt will reach $16.7 Trillion in the next 18 months as Socialist President Obama is asking Congress to raise the Debt Ceiling by another $1.2 Trillion with no end in sight.   Effective last January, 78 million Baby Boomers in the US began retiring at the rate of 10,000 a day with the full expectation that their Social Security and Medicare benefits are secure, when in fact both those entitlement programs are headed toward insolvency and bankruptcy.   This is the case because our elected Representatives, since 1965, stole the money that was supposed to go into the Social Security Trust Fund to pay for future Social Security benefits and spent it years ago to buy elections.   The Social Security Trust Fund is left with IOU's from the federal government that are not worth the paper they are written on because the US is headed toward bankruptcy.  

Socialist President Obama is borrowing 40 cents for every dollar spent by the federal government as he continues to add to the National Debt at the highest rate in American history.  Obama will add $5 Trillion to the National Debt in his first term in office more than any other President in our history.   Bush II added $4 Trillion in 8 years in office, which was bad enough.  But it is even worse than this picture.   Around the world, politicians are borrowing money to roll over their National Debt and in doing so add even more too it.  This fiscal insanity is the equivalent of using one credit card to pay off the debt on another credit card, while still adding new charges.   In our case, one of the significant new charges if it is not struck down by the Supreme Court, or repealed by the Congress, is ObamaCare. 

There is simply no way this can continue.   At some point, as is happening in Europe, the markets say enough by demanding very high interest rates on new borrowing.   These higher interest rates just exacerbate the problem adding to the National Debt.  As interest rates go up, the cost of borrowing for private citizens will also sky rocket making economic growth and new job creation impossible.  It is a vicious death spiral that can only end in economic collapse.  Before it happens, however, the Federal Reserve and or its equivalent overseas will just start printing money to pay government bills and entitlements.   When that happens the value of a currency is destroyed and inflation will go through the roof.  It is already happening.  It isn't that gasoline actually cost $3 a gallon; but rather that the dollar is worth a third what it was worth a few year ago.   The US Federal Reserve has been busy printing money and destroying the value of the dollar. 

Our elected representatives of both parties have proven that they cannot be trusted to protect the interests of the United States.  The same is true overseas.   In the case of the US, the only answer in addition to sweeping Socialists, at all levels of government, including President Obama out of office in 2012 and 2014, is a Balanced Budget Constitutional Amendments, which outlaws borrowing unless we are in a declared war, or other recognized national emergency.   We have to cut the size of government in the next five years by eliminating 500,000 federal civilian employees out of the current 2.65 million by normal attrition; but that will not be enough without a Balanced Budget Constitutional Amendment in place to stop the deficit spending that is bankrupting our country. 

We have to take back our country in 2012 and 2014 to get our fiscal house in order.  We have work to do.   We have to put on our hip boots and drain the swamp that is Washington DC.  We can do it.  We must do it to preserve our freedom, our nation and way of life for the sake of our children and grandchildren.  In the mean time, the world in debt, with no end in sight, is a real threat to our national security.   Hopefully, politicians will do the right thing to prevent economic collapse; but I would not count on it.          

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