The reality is, the average American’s economic well being has been dropping for the past 7 years and still, I hear those who want more of the same despite the facts clearly showing failure of this administration. The numbers of informed voters are not yet large enough to make a difference.
One cause of our economic malaise is our rapidly growing debt. By any measure, it is threatening to overcome us and will one day unless it is reduced. It is now time American voters look to a new way, limited government which will in turn lead to less debt and more economic activity taking place in the more efficient private sector instead of the highly inefficient and wasteful public sector.
However, there is some cause for hope. In my latest readings on the economy, I am starting to see facts being clearly communicated which show our leaders’ being called to account for their economic malfeasance.
Please voter, learn the facts and wake up!
America’s soaring debt was mentioned by speakers during the Republican National Convention however, there was little talk of the implications of the debt’s impact on the American economy and even less treatment of a cure for the lurking economic and social threats the debt poses.
According to the Department of Treasury, it stands at $19,402,361,890,929.46 as of 7/19/2016.
One question comes to mind, if we broke the iron triangle between the federal government, the national debt’s beneficiaries, and the Federal Reserve what would happen? Let me proffer one scenario. Imagine if the Federal Reserve raised interest rates to historical norms. From at dated (2014) Forbes piece:
“Historically, normal interest rates for U.S. government debt is in the range of 4 to 6%. In fact, before the recent recession both 2 and 10 year government bonds had been between 4.5 and 5.25% for the preceding two years. Rates now are approximately 0.5% for the 2 year note and 2% for the 10 year bond. The difference between the cost of the national debt at current rates and historically average ones is enormous
For the fiscal year 2014 that ended last September, the federal government paid $430.8 billion in interest on the national debt. Back in 2004 with “only” $7.3 trillion in debt, the interest bill added up to $321.6 billion. With only 40% as much debt, the government was paying 75% as much in interest. If the federal government was currently paying an historically average interest rate on the debt, instead of $431 billion in interest the annual bill would be around $900 billion.”
Now to the DC crowd, $900B may not seem like much; it is to this humble writer. Given this, I do not see the triangle being broken and low interest rates will continue to fuel bubbles of malinvestment.
For better part of the current century, Americans see via the multitude of news mediums, stories depicting a weakening of the American Empire. Almost daily, we see lower economic prosperity , diminishing social cohesion, and faltering international relations devolving our nation into despair and chaos. Seeing this reoccurring montage and showing some level of concern is not a form of paranoia or being Chicken Little. One can reasonably infer that America is in trouble; maybe not quite to the extent of Thomas Cole’s 1836 depiction below but looking at the White House’s Friday night dump of the prediction of 1.9% GDP growth for 2016, the recent civil unrest in Dallas and other American cities, and the ISIS inspired slaughters around the world one could with solid sanity conclude America is sliding into a morass of growing poverty and violence.
What can be done? This is not an easy question to answer however, only a fool would advocate for a continuation of the status quo big government. So please become educated to perils facing us and speak to others about our ills so someday, American citizens will demand a real change and remove the shackles this big government has on its citizens.
After reading Walter Williams’ post on:
I found this piece to be very timely and interesting…..
In a global economy, it is ludicrous to think a country can have a comparative advantage in every area. The $60B vs. $990B figure for imported raw vs. steel products is very telling. However, the “middle class”, (workers in steel and other industries under siege) must be considered to be important to any nation’s social and economic well being. In order for that group to flourish, fundamental factors must be addressed including but not limited to: currency, cost of capital and labor, education, taxation, regulation etc.
Obviously, these debts can never be repaid so the sooner we and other countries do an economic reset the sooner we can put in place a new financial system that can carry the world into the 21st century. When the inevitable reset happens, it will be very, very ugly so my hope is that leaders and citizens recognize that an orderly reset is preferred over a black swan that puts his webbed foot on the reset button.
Ike’s 1961 warning of the Military Industrial Complex have not been fully heeded. Here is a recent example of our nation’s willingness to unquestionably believe and fund this behemoth.
Santayana is popularly known for aphorisms, such as “Those who cannot remember the past are condemned to repeat it,”
We are paying the price in dollars but even worse is, we could be lulled into a belief we are safe from the existential threat of nuclear warfare for not following Ike’s advice. We must continually question government and hold their feet to the fire.
Whether one believes Hillary Clinton’s use of a private email server while Secretary of State to be in violation of federal law or not, you have to be concerned what our nation has become in terms of its pursuit of justice in this matter. One holding either view (it was a violation or it was not a violation of the law) on the aforementioned issue can reasonably suspect the United States has taken on the moniker of a banana republic in its handling of the matter.
The former president who may be part and parcel of the investigation into Hillary Clinton’s use of a private server met with the nation’s chief law enforcement office in a clandestine meeting in Phoenix, Arizona. You also have Barack Obama saying that Clinton did not endanger national security, and both the president and vice president endorsed her without waiting for the investigation to conclude.¹
Congress must reauthorize the automatic appointment of a special prosecutor in cases of suspected wrongdoing by high-level members of the executive branch of our government so that we are not a banana republic.