The cure for debt is NOT more debt…
At Craven Capital, we suspect that we’re not the only ones lying awake at 3 a.m. worrying about debt. Most of us worry about our personal debt and how to reduce or get rid of it.
But what about the other invisible debt that every one of us is carrying on our personal balance sheet? What invisible debt, you might be thinking. “I don’t have any invisible debt. My debts are all too clearly visible”.
The invisible debt is that $51,000 (give or take) that is your share of the national debt. And our share too…and everyone else in the “land of the free”.
What….you might say…where the _____ did that come from?
Well…let’s do the math.
Roughly we have 314,000,000 people in this county and at last count, the national debt was closing in on $16,000,000,000,000 (16 trillion)…but who’s counting.
We’ll tell you who’s counting…the folks who are owed the 16 trill. That’s who. Those folks are counting on being repaid and a large, large number of them are not Americans.
By now you are thinking….”that’s not my problem….that’s the government’s problem. They borrowed the money, let them pay it back”.
Ah…but that’s the problem….the government has no money. To which you respond…”yes, I know. They are broke”. To which we respond…No…the GOVERNMENT HAS NO MONEY, PERIOD, FULL STOP, NEVER DID, NEVER WILL!
Every cent that government spends has to come from its taxpayers. Yes, it has a printing press but to maintain any vestige of legitimacy (and therefore confidence in the currency) the government must account for all money printed. Thus you have the Fed printing and the treasury borrowing. This is done on a cash basis because accrual accounting is only for the rest of us who must recognize that future unfunded liabilities actually exist. If we add in Social Security, Medicare, Medicaid and the future unknowable costs of Oh-What Do I-Care, your $51,000 starts to look more like $251,000.
When your government spends approximately 40% more than what it collects in taxes from its funders (that’s us folks), it borrows the balance. But remember, THE GOVERNMENT HAS NO MONEY. So it is using the good credit of future generations of American taxpayers to fund that balance…and it’s been doing it for far too long.
Think about it…the government spends all of the taxes it collects (confiscates may be a better term) from current taxpayers, but that’s not enough. So then it borrows the balance from future, many as yet unborn, American taxpayers. Is this fair? Of course not! It is like us selling our future unborn children into serfdom in order to fund our current lavish lifestyle.
Of course, it’s not fair. But governments are rarely fair…or just. But now we are starting to hear the official mantra that no one could possibly be successful in this country…if not for the government paving the way. Hogwash! Utter hogwash! But, the bigger the misspeak…the more likely it is to ring true.
Stay tuned. In future posts we’ll be looking for who to blame for this mess. We suspect that the lineup could be very long…and quite illustrious. We’ll also examine what it all means to us…and what we can do about it.
