No one seems to care that a government already over $22 trillion in debt is on schedule to borrow another $990 million this year. All of this is occurring as individual Americans further enslave themselves with higher debt loads and retail stores fail over the inability to pay back the money they borrowed. But there are many reasons to be concerned about government spending.
The debt-based system we live under won’t sustain itself forever. Don’t get us wrong, the sociopaths in government and at the Federal Reserve (central bankers) will prop it up for as long as possible, but it is doomed to fail. That $22 trillion doesn’t include unfunded liabilities either, making the situation even uglier.
According to ABC News, The Treasury Department on Monday projected that borrowing in the April-June quarter would total $30 billion. Borrowing in the July-September period, the final quarter of the budget year will total $160 billion. The $990 billion borrowing total for the 2019 budget year would be down from $1.2 trillion borrowed in 2018. But both years are up from 2017’s $519 billion in government borrowing.
The Foundation for Economic Freedom (FEE) reported that the deficits are likely to double within ten years, making this an issue that could impoverish everyone. There are 5 reasons why the national debt is a big problem and why everyone should be worried about it.
- Benefits Spending: Most federal spending is for subsidy and benefit programs, not for activities that increase productivity. Subsidy and benefit programs distort the economy and generally reduce overall output and incomes. Those distortions occur whether spending is financed by debt or current taxes. But the availability of debt financing induces policymakers to increase overall spending, which at the margin goes toward lower-valued activities.
- Tax Damage Compounded: When taxes are extracted to pay for government spending, it induces people to change their working and investing activities, which distorts the economy and reduces growth. When spending is financed by borrowing, the tax damage is pushed to the future and compounded with interest costs.
- Investment Reduced. Government borrowing may “crowd out” private investment and thus reduce future output and incomes. Economist James Buchanan said: “By financing current public outlay by debt, we are, in effect, chopping up the apple trees for firewood, thereby reducing the yield of the orchard forever.” The crowd out will be reduced if private saving rises to offset government deficits. But the CBO says “the rise in private saving is generally a good deal smaller than the increase in federal borrowing.” Government debt may also deter investment through expectations—businesses will hesitate to invest if rising debt creates fears of tax increases down the road.
- Borrowing from Abroad. A decline in private investment due to government borrowing may be avoided if capital is attracted from abroad. Indeed, huge federal borrowing has been facilitated by global capital markets, and today more than 40 percent of the federal debt is held by foreigners. Borrowing from abroad may prevent a fall in domestic investment, but it does not prevent the shifting of costs to future taxpayers. As government debt rises, more of our future earnings will be taxed to pay interest and principal on the government’s debt to foreigners.
- Macroeconomic Instability. CBO warns that a “large and continuously growing federal debt would … increase the likelihood of a fiscal crisis in the United States.” Experience shows that high levels of government debt tend to reduce growth and increase financial fragility. In their study of financial crises through history, Carmen Reinhart and Ken Rogoff concluded, “again and again, countries, banks, individuals, and firms take on excessive debt in good times without enough awareness of the risks that will follow when the inevitable recession hits.” Government debt, they found, “is certainly the most problematic, for it can accumulate massively and for long periods without being put in check by markets.”
There is no chance that anyone voters choose will correct this situation. The media is already propagating for the government and has a hissy fit when one even suggests cuts to spending. In fact, politicians are pandering to the illogical masses about creating a huge spending program called “Medicare for All” and wiping out over $1 trillion in student loan debt. Those will just bring the eventual economic collapse closer as the U.S. is past the point of return. The country will collapse in the future. It is impossible to say when, but this is an unsustainable trajectory.
There is honestly very little any of us can do, unfortunately. Voting won’t help as cutting government spending isn’t the way to get oneself elected as a political overlord. As Michael Snyder pointed out recently on The Economic Collapse Blog, individually, there is very little that we can do about our national debt, state and local government debt or corporate debt. We can try to vote people into office that want to do the right thing, but unfortunately, fiscal responsibility and financial reform are not hot button political issues right now.
Snyder added that what we can do is get our own financial houses in order. Now is not the time to take on more debt, and paying off any debt that you have already accumulated would be a very good thing when the debt-based economy comes crashing down around us. –SHTFPlan
All we can do is get ourselves prepared and in a position to survive the coming collapse; whenever it may be.
DEBT is the worst 4-letter word. OK, it doesn’t end with “K”, but it will ruin your life if you let it.
“The debt-based system we live under won’t sustain itself forever”. Yes, it will. As long as all parties agree to the rules of this corrupt, syphilitic Monopoly Game, the rusty Ferris Wheel will just keep turning. Debt bucks are an accepted means of exchange for goods and services. Anyone who challenges that is marginalized by the rest of the Eloi, or prosecuted and jailed by the Leviathan.
When the uncertainty of Y2K reared its head over 19 years ago, Clintonia pre-positioned pallets of greenbacks all over the country to stave off any panic. In spite of all of the secret machinations and plans of the Globalist Illuminati elite, Wall Street insiders, and the International Banksters, an economic collapse would be too horrific even for them. Their bolt-holes overseas and in places like Jackson Hole and Sandpoint will not protect them and they know it.
Why are we being told of our miraculous, financial success (especially for blacks, Latinos, and women, especially) while running a deficit. Who created this opportunity. Where does it come from.
Do you seriously think they would tell you the truth?
I think that they’re globalists, or they wouldn’t be negotiating with foreign countries.
I figure thats about 7% of rothschilds wealth. You never hear about the multi-trillionaires. The REAL masters of the world.
Mac, I appreciate what you are saying. But in all due respect you could stop with the first words, “No one seems to care that a government already over $22 trillion in debt”.
The vast majority of American sheeple don’t even know how many zeros that is. Ask them to define ‘compound interest’ and you’ll be looking at deer in the headlights. According to Experian the average American has a credit card balance of $6,375. Like John Wayne said, “Life is hard and it is even harder if you are stupid”.
Not a one of us has to play this game. We all tout our ability to ‘survive’ whatever may come, right? Simplest rules: don’t be in debt; don’t expect a thing from the government (it’s got nothing left to give); don’t whine about some SSI/Medicare/any other payment that you paid into…. the money’s gone/doesn’t exist/was already spent years ago… accept that and move on, save and save some (or as it is said… keep stacking) more on-site/@ your home out of the system; stay healthy, stay in shape, practice what your skills are and learn some new ones; be the guy/gal that doesn’t follow the herd – be an individual; and last think…. prioritize your life and learn to be satisfied by needs met.
Governments default on their debts all the time. The sky never falls. The lesson is – don’t loan government money.
Ironically, AFTER default the government becomes a wonderful credit risk.
Yes I don’t care. However if I did care So What? still nuthin I could do about it. Im debt free and I don’t owe one penny of the goverments debt.
You may not have no debt however, if you own land, a small business etc…the freaking government will come in and take from you by force if necessary, but they will take it, use it, sell it and take the proceeds and use the revenue to pay the creditors (i.e., China, Russia etc…). Even the land that you think you own is not yours it belongs to the government. My sister found that out a few years ago. The state was upgrading the power grid they needed 2 acres of their land to position these towers. Government offered fair market value. My sister wanted more, long story short family attorney told her to accept the offer or they will take the land and you will get nothing. They would use eminent domain law.
How do you figure you “don’t owe one penny of the goverments debt.”? Are you not a citizen? A patriot?
“Investment Reduced. Government borrowing may “crowd out” private investment and thus reduce future output and incomes”.
Most certainly. I quit keeping a significant savings amount in CD’s and moved to Tbills. Tbill interest is not taxable by my state and Tbill interest is higher that the best CD rate available anywhere in America.
That warps the system. The Credit union no longer has my savings to lend to others. A significant percentage of my Federal taxes get paid back to me in the form of Tbill interest, so essentially it is to my advantage for Tbill interest rates to be high. That really warps the system!
I’m a very small investor in Tbills. Trillions are invested in US Treasury debt instruments. Do the math.
It is “Joe Blow” that is getting screwed by the system. Ride the wave while it is good and prepare for the wipe-out.
The point is moot regarding government borrowing crowding out private investment. Uncle Sam runs a deficit and the Federal Reserve creates the shortfall out of thin air. That extra purchasing power, regardless if it’s spent by private citizen or government buys things. Welfare entitlements with food assistance are the default source of income in vast sections of the country. This created money, and it will be created buys weapon systems that employ masses in the Military Industrial Complex. “Crowding out” private borrowing was prior to QE a concern. Money is divorced from inherent value, that’s the problem.
“No one seems to care that a government already over $22 trillion in debt is on schedule to borrow another $990 million this year.”
No one also seems to care that $990 million is a lot different than $990 BILLION…damn, if you are going to talk about how stupid Americans are, get your shit together first.
I think you meant to say that the Government was on track to borrow $990 billion and not million. If only it were $990 million!
Aloha rellik. “Ride the wave and prepare for the wipeout.” Cowabunga! Hope the folks can hold their breath until they resurface. Those that prepared should make out OK. Reminds me of the old days.
Keep on importing those illegals that contribute to the economy…Welfare, Food Stamps, Section 8 Housing, TANIF, Medicaid, Lower Education Standards, Drugs, Human Trafficing, Did I forget anything??????
The government will be $75 trillion in debt by 2050.
…..In order to pay $50k per year per obese person’s medications and motorized scooters, that’s why. …..and the millions of surgeries, cancers, and the cost of housing one million obese stroke victims that shit themselves while eating their high fructose corn syrup the American farmer loves [subsidies].
Nothing to be frighten of, the trillions are already baked in the cake.
Hmmm … not a peep regarding huge ‘defence’ outlays. As usual, with conservative blogs, this one suggests that Medicare for All and other bennies are the major driver of debt.
If governments do not exist to look after their citizens, then why *do* they exist at all. Why do we suffer them?
Wanna bring down the system sooner?
No new loans. Cancel credit cards. Do not borrow currency for any reason. Then, get ready for the fallout.
Those who have used compound interest to enslave us will be the first to go.