The government has been talking about fiscal responses and solutions to the nightmare the coronavirus pandemic is wreaking in our nation and world. Those responses include multi-trillion dollar price tags. Given the panic and hysteria that we see from across this nation, does anyone really know whether such responses will help, or just postpone the inevitable collapse of an economy that has been propped up, for too many decades, by destructive credit policies? Is it possible that the coronavirus is simply the proverbially, “straw that finally broke the camel’s back?”
A couple of weeks ago, in a knee-jerk response, the current administration offered a $1 trillion “mini solution” and the markets tanked as it was being announced. Then, a week ago, the President suggested the idea of stimulus checks of $1,000 to every American, with a price tag of approximately $1 trillion dollars. But Trump had no more gotten that idea out of his mouth, when others were suggesting that wasn’t enough. Now, that “measly” trillion dollars has ballooned to $3-4 trillion and the individual stimulus checks are several thousand dollars for most citizens. And if I were a betting man, I’d wager we still haven’t seen the upward limit of the free money that is going to be printed up and distributed to a populace in need.
There is no doubt that our families, neighbors and citizens are in need. Consider that 80% of Americans live paycheck to paycheck, and millions of our neighbors have now lost their jobs for an indefinite period of time because of the closure of their employers by our government. The ability for these unemployed families to even pay for toilet paper (if it were available), but more importantly bread, eggs and milk, is not just limited, but unlikely.
▪️Is Government Liable?
So, if the government, in its estimation, believes that shutting down businesses is the best course of action to protect lives, then it seems that government is liable for making the affected workers (and perhaps businesses) whole. Without debating the decision itself, I believe under any other circumstances, this would likely be the conclusion of any court were it to be adjudicated in front of a judge.
There has never been a scenario like this in our history, of which I’m aware. But the bigger issue is this. Even if the government is liable to the individuals it is harming by its efforts to protect lives, how does our government cover its liability? In an ordinary situation between two parties, if one party harms another, the offending party must make the offended party whole, OUT OF ITS OWN RESOUCES.
In this case, the government is the offending party (in an effort to save lives, which I happen to agree with). The unemployed citizens are the offended party. So what are the government’s resources? Resources equal assets. But one cannot ignore liabilities when discussing resources. In the case of our nation, not only do we have a current national debt of $23,000,000,000,000 (that’s trillion), but we have additional unfunded liabilities for things like Medicare, Medicaid, and such, that total over $150 Trillion in debt. We don’t have the ability to pay the $23 trillion in current debt, so do you think we can pay the $150 trillion that is coming due in the upcoming years?
So where are the trillions going to come from to cover these stimulus checks and bailouts that are forthcoming? Yes, I’ve read that some of the amounts extended by the Feds will be in the form of loans, but that begs the question. Where do all the trillions of dollars come from? The answer is they will come from the same unsound credit policies as the Feds have used for years to cover their previous trillion dollar deficits.
▪️Your Rich Uncle
Consider this though. If you were living lavishly for decades off of a credit card that had an unlimited credit line from your rich uncle, and your uncle finally stepped up and said, “No More!” what would that do to your lifestyle? Particularly, what would you do when the uncle demanded you pay the credit card balance, when you had no ability to do so? Can you say BANKRUPTCY?
In this case, the “rich uncle” for America has been the exceptional privilege America has profited off of as the world’s reserve currency. Other nations and investors have extended credit to us for decades because we were perceived to be a better risk than any other option out there. But more and more, our stellar credit status has been dropping. And again, if I were a betting man, I would wager that this vast Ponzi scheme that our Federal government has been engaged in for years, with the help of both political parties, is about to come to an end.
Am I a doomsday prophet? No. I’ve been writing about this coming collapse for years. And it’s not because I have the mental wherewithal to figure it all out, but rather because there are people much smarter than me who have been warning of this for decades as well. But no one is listening.
▪️Where is the Hope?
But you may ask, “so if there’s no fiscal solution, where is the Hope?”
Well, while I don’t believe there is a permanent solution to the fiscal nightmare we are now living through, I do believe there is Hope for each of us individually. But it will require each of us to think outside the box; to consider options we haven’t considered before; to prepare for what could happen. And if, by some providential move, we are granted another brief period of reprieve from the inevitable coming economic collapse, we should not be lulled into believing that our genius leaders have saved the day. When a doctor causes a fatal wound, but he then puts a bandage on the hemorrhaging gash he caused, you wouldn’t then sit back and start enjoying your “bon-bons” believing that the negligent doctor saved the day, would you? You also wouldn’t congratulate the doctor on a job well done.
▪️What to do?
So what should you and I do? In a minute I’ll share what my first step would be. But here are a few suggestions:
I would prioritize the welfare of my family and loved ones, and then my neighbors, if possible. If you could rewind your life 30-45 days, knowing what you know now, what would you have done then to prepare for where we are today? Likewise, if you took a few minutes to consider where things might be in 30-90 days, if things not only don’t get better, but rather they get exponentially worse, what would you wish then that you would have done today?
In other words “Prepare.” The old “ounce of prevention is worth a pound of cure” should guide your steps.
Nearly a decade ago a group of my friends and I began meeting over the course of a year or so to “Prep” for the possibility of an economic collapse. We put together checklists and discussed steps we should all take in the event that something like we are seeing actually occurred. At the time many would have suggested we were alarmists or worse. But those meetings were extremely helpful in preparing us for what did finally occur these last few weeks. (See the three hyperlinks above for the documents we prepared then.)
Now I don’t share this to suggest that all the items on my checklists in 2011 and 2012 were addressed. I wish I had some more toilet paper perhaps! But the “ounce of prevention” philosophy is one I can encourage you to consider as well. If you’re stuck at home, you now have time to consider what you would do for your family to prepare for what could occur in the future.
Our nation’s fiscal situation has not improved in the last 8 years. In fact, it has gotten exponentially worse. And that was before another several trillion dollars is being borrowed, printed, or created out of thin air, by the big spenders in Washington. So, if the coronavirus is in fact the straw that’s finally exposing our fiscal foolishness as a nation, what could that next straw be? I don’t know. But I also don’t want to be unprepared.
▪️Our Ultimate Hope
So I mentioned I’d share what my first step would be and here it is. I would turn my heart and mind to God during this dire crisis. The greatest threat to you and me today isn’t the COVID-19 virus. Rather, it’s the universal virus that we all share, one that entices us to replace God our Creator, with our own false gods. The gods of wealth, sports, entertainment, politics, pleasure, career, business, travel, or whatever else might be in the forefront of your life and mine. It’s a universal temptation to elevate something temporal, that does not satisfy, in place of the One who is eternal, and completely satisfies.
God is speaking through this crisis. In fact, I would suggest this is God’s crisis. Throughout the Bible we see that it is God that brings both “calamity and good” and “He controls the course of world events.” He does so to get our attention, to disrupt our lives, in order to turn our hearts back to Him. We are a proud people and an even prouder nation. But God resists the proud and even humiliates them. But He also elevates the humble. Could there be any greater example of God humiliating a proud nation and even world than what is happening now as all those “gods” we worshipped are crumbling before us?
So, if there is one silver lining in all this, it is that we all have time to turn back to Him. We have time to open His Word. We have time to fall on our knees. And as we do, we will begin to hear what it is God is speaking to us individually, so that we can repent and turn to Him. As we do, we will find the Hope and Encouragement that is so desperately needed “for such a time as this.”
💡“God controls the course of world events; he removes kings and sets up other kings. He gives wisdom to the wise and knowledge to the scholars.” Daniel 2:21
💡“Who can command things to happen without the Lord’s permission? Does not the Most High send both calamity and good? Then why should we, mere humans, complain when we are punished for our sins? Instead, let us test and examine our ways. Let us turn back to the Lord.” Lamentations 3:37-40
I was recently reading an email from a friend of mine who was warning about the threat of Islam in America. It caught my attention because for many years I too warned folks about the threat of radical Islam. In fact, following an attack by a deranged Muslim in Chattanooga a few years ago, I personally organized an event that featured a prominent international expert on Islam. That event drew over 400 individuals, garnered plenty of media attention and as you can imagine, created a fair amount of controversy as well.
My friend’s email went on to warn that “the hand writing is on the wall” with regard to the Islamist incursion into America’s government. While I don’t disagree with the assessment in general, the “hand writing on the wall” took my mind to a verse I read a few days ago. Jesus was speaking with His disciples when He shared this truth:
“…You know how to interpret the weather signs of the earth and sky, but you don’t know how to interpret the present times.” Luke 12:56
It’s likely many Americans are well versed in interpreting the dozens of warning signs that have been apparent for decades now in our nation. We see the threat of radical Islam, the pending repercussions of an exploding debt, the impact of a crumbling moral decline, the results of a failing educational system, along with the too many other obvious threats to mention here. And these threats are all real, without question.
But these threats, are merely signs of a much greater storm that is brewing — an eternal one. While the aforementioned threats pose great danger to the future of a nation, and they have no doubt awakened the passion and activism of many to expose and defeat them, I question whether there are some greater signs, of eternal consequence, that we are missing or perhaps ignoring?
I don’t assume that everyone who might read these thoughts will embrace the Bible, but I would venture to guess that many do. So if this is true, I’m also reminded of the verse that asserts, “What does it profit a man if he gains the world but loses his soul?” Perhaps an amplification of this verse (which I believe is true based on numerous other passages) could be “What does it profit a man if he gains a nation, but loses the souls of his fellow citizens?”
As real as the threat of radical Islam is to our nation, the truth is that each Muslim has a soul. God loves every one of them. And God’s Son Jesus died for each Muslim. For that matter, He died for each of us. So as we may warn about the ideology of radical Islam, and its questionable history, (of which I am quite familiar), there is a greater sign that I believe Jesus was referencing when He warned His disciples. (By the way, I’m reminded of a radical Jew who went about persecuting and killing Christians, until Jesus transformed his life and he became one of the most widely read authors in the New Testament, who we know as the Apostle Paul.)
There is nothing bad about being informed about today’s highs and tonight’s lows when it comes to our weather. But the greatest value of forecasts is when a tornado or hurricane is bearing down on your home. At that point, having the most relevant info to protect against such a storm, is of great value.
Likewise, there is a spiritual storm brewing. The eternal implications vastly exceed the temporal impact of the myriad of issues, many of them good, that can distract us from one day to the next. But the truth is that the battle that is raging is for “all the marbles” and those “marbles” are the souls of men and women, not merely the future of a nation.
I do not share these thoughts to judge or convict anyone who might read this, as they are written to me as much as to anyone else. These are thoughts I have been thinking through for some time.
Someday each of us will stand before our Creator to answer for the use of our time, treasure and talent. Personally I must confess I’ve misused all three of these over the years. So I have wondered if attempts to save a nation, will be impressive to God, or will He ask me and you, a different set of questions?
What about your neighbor? Did you love him/her? Did you share My truths with him? Did you reach out to that one that you disagree with, but I died for? Did you show him the love My Son expressed towards Him? Did you love your enemies (as I instructed you to)? Did you forgive your enemies, as Stephen did when he was being stoned to death by his enemies?
Only you can weigh whether these questions are valid. Only you can evaluate what you believe to be the pressing “signs of the times” to which Jesus alluded. But as you consider these thoughts, and evaluate the signs, I would encourage you to read the entire chapter of Luke 12 so as to gain the context within which Jesus warned His disciples about the “signs of the times.” For me it was instructive to better understand just what Jesus was discussing.
I look forward to any thoughts you might share as you consider my thoughts and this verse. And may we all be like the sons of Issachar who we are told were men who “understood the signs of the times and knew the best course for Israel to take.” (I Chronicles 12:32)
As a people, Americans are accustomed to solving most any problem that confronts us. Whether it was leading a world coalition to defeat the Nazis or responding to Japan’s surprise attack on Pearl Harbor, as a nation we have consistently risen to the occasion when we were faced with an existential threat. And, by the grace of God, over our 240+ year history, our nation has weathered even the worst of those threats.
A few days ago, Donald Trump held a press conference in which he described what he inherited from Barack Obama as a “mess.” Specifically, he had this to say:
“As you know, our administration inherited many problems across government and across the economy. To be honest, I inherited a mess! It’s a mess! At home and abroad. A mess!”
He went on to describe some of that mess in his comments. And he spoke of these problems frequently during his campaign:
Loss of jobs Our economy National security A weakening military Crumbling infrastructure A broken healthcare system Spiraling, unsustainable debt A broken immigration & refugee system
President Trump is right that our nation is in an absolute mess. Many have been saying this for a long time. But with the election of Trump, and Republican majorities in both the House and Senate, the power to address the “mess” has shifted to the GOP. They now possess the authority and ability to implement whatever solutions they deem appropriate to deal with the many crises America faces.
Granted, it’s possible and likely that Donald Trump and Republicans in Congress will implement some sound political approaches and pass worthy legislation that will attempt to address these problems. If this battle was being played out on a football field, Republican efforts might advance the ball a few yards towards the goal line of greater prosperity, security, efficiency, lower taxes and more.
But lest we get too excited, the root of our nation’s problems does not stem from a dysfunctional Congress, an activist judicial branch, or even an unorthodox or confrontational President. Their behavior is merely a symptom of a much deeper struggle in our nation.
There is an old adage that goes: “Never bring a knife to a gun fight.” Fighting spiritual battles with political weapons will never offer a permanent solution. If fans attend a football game and they grow excited by their team moving the ball a few yards, but that team doesn’t possess the plays to score a touchdown, then those fans will be continuously frustrated, despite the brief exhilaration if a first down is achieved.
Likewise, using a knife to carve out a political strategy simply offers the exhilaration of a few short term victories. And while I would not diminish the importance of such wins, from a grander perspective of the battle our nation is embroiled in, these “wins” will be akin to a solitary first down, only to see the ball fumbled to the other team.
The fight our nation is embroiled in is a much deeper fight; one that has spiritual and eternal implications. The Bible speaks of this battle in Ephesians 6:12 — “For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this age, against spiritual hosts of wickedness in the heavenly places.”
While I acknowledge it is not the role of government to solve spiritual problems, it is possible for rulers or elected officials to compound those problems. And we have seen this occurring for many decades now, through legislation, regulation and policy.
In years past, there was a list of transgressions known as the “7 Deadly Sins” which originated shortly after the time of Christ. That ancient list, drawn from the Bible itself, is a modern day indictment of our own nation:
Lust Gluttony Greed Sloth Wrath Envy Pride
Think through this list and see how they perfectly describe many of the ills our nation is facing.
Lust is front and center nearly everywhere you look: TV, movies, magazines, billboards, internet. It’s nearly impossible to escape.
Gluttony is epidemic in America with more than 1/3 of our citizens obese. And by 2020, it’s estimated that nearly 3/4 of Americans will be either overweight or obese.
Greed is typically associated with Wall Street, business owners, and multi-millionaires. But truthfully, greed is rampant at all socio-economic levels. The entire American culture has been organized around our insatiable desire to accumulate more and more.
Sloth or laziness is synonymous with millions of Americans. While certainly there are many who are unemployed who desire to work, there are literally tens of millions who would prefer to live off the welfare state.
Wrath is seen from DC to small town America. There is no shortage of anger in our nation today. While Donald Trump tapped into a lot of anger, we are seeing different types of anger displayed now that he is our President, and some of that anger is turning violent.
Envy is what drives many in our nation. We lack contentment because we desire what others have. And that desire is not limited to material things but can include status, abilities, and even desiring the characteristics of others.
Pride is seen by some as the worst of the seven deadly sins. By reciting such phrases as “if you believe it, you can achieve it” and other similar concepts, we remove God from the equation, exalting self to the position that only God should occupy.
If you’re like me, I can look through the list above and feel like I’m looking in the mirror for many of these. Sure, none of us are perfect. But how many of us can honestly acknowledge our shortcomings and say we are actively engaged in addressing those shortcomings, through God’s help, on a routine basis?
You see, our nation is a composite of its 330 million citizens. It only reflects what is in the hearts of its people. While we may bemoan the actions of our elected officials, if we’re honest, we’ll admit that they merely reflect what is in our hearts. Nothing more. Nothing less.
So, if we want to solve the many political solutions America is facing, it starts at the most fundamental level — looking in the mirror and beginning to address the spiritual problems in our own individual lives. As we do that, and only when we do that, can we ever hope to solve the seemingly insurmountable political problems facing our nation.
So what say you? Are you ready to start? If so, then get up, walk to the nearest mirror, and join me in saying: “Let’s change America… starting with me!”
This week, with the talk of many in our nation focusing on Trump’s latest Executive Order, which temporarily halts refugee resettlement, liberals and their funded activists are up in arms and taking to the streets. Even some Republicans are raising concerns over both the content of the EO’s and the way in which they were implemented.
However, lost in all the turmoil is one aspect of our nation’s refugee program that is seldom discussed but should be of great concern to anyone who has ever worked through a budget, whether in your family or business. Here’s one thing we can all agree on. If your budget doesn’t have a surplus or at least balance, then you look closely at the line items of your spending, with an eye towards either reducing your expenses and/or increasing your revenue.
So I thought it might be helpful to understand the fiscal impact of our refugee resettlement program on our nation’s budget. As we look at that cost, we should remember the points made in my previous article about The National Debt. Specifically, our nation’s spending is creating over a half-trillion dollar deficit every year. Additionally, in another of my articles, $10 Trillion New Debt, we are projected to average nearly a trillion dollars in deficits every year over the next decade.
Given these alarming multi-trillion dollar deficits, it’s safe to say that America has no excess funds to allocate. PERIOD. This fact should be weighing heavy on the minds of our political leaders. But the truth is that you never, ever, hear them speaking of the fiscal impact of the 85,000 refugees that were brought into our country last year; or the 50,000 that Trump’s policies would continue to bring in annually.
The Fiscal Impact
There are several reports that I’ve studied about the cost of the refugee program. But the report from Center for Immigration Studies is in my view the most complete, and the excerpted facts below reveal the disturbing fiscal impact of our nation’s refugee program:
America has a long tradition of caring about those beyond our own shores. Whether it’s sacrificing our own young men and women to bring freedoms to some distant land, or offering aid and relief to those less fortunate than us in remote areas of the world, our actions reveal our heart. And ours is a generous one.
But there is a fundamental principle of charity or generosity, and it is that one can only give from what one has. In order to give, one must possess. And to possess, one must be fiscally wise, if not conservative. For too long America has not only been fiscally liberal, but worse, we have been irresponsible and foolish. We have feigned generosity to those less fortunate, both here and abroad. But that “generosity” has come at the expense of enslaving our children, grandchildren and future generations with an indebtedness beyond a level ever known to any prior society throughout history.
Consider for just a moment the example of a family of great wealth. The resources the parents own and manage are significant. But despite their assets and current income, their outflow far exceeds their inflow. But to subsidize their obsessive spending, they begin to mortgage their assets, rather than scrutinizing their spending. This continues over the course of many years. Soon, the amount of indebtedness surpasses their own income, future income and even the value of their assets themselves. What was once presented as a tremendous opportunity to pass on a legacy of wealth and good to their children has become a matter of horror and great indebtedness. And why? Because the leaders of this family were unwilling to face the reality that their spending spree over the course of many years completely depleted their resources and enslaved those they loved the most.
America is like the family above. And those “parents” are our political leaders as well as those of us who continue to give those same leaders the reins of our nation, election cycle after election cycle. On this one issue, refugee resettlement, what is meant for good by many, is in fact contributing to a reckless cycle, year after year, of mounting more and more debt, to the point that someday it will all come crumbling down. And those refugees that we intended to help will be enslaved along with our own children, to an indebtedness that will burden their lives in such a drastic and oppressive manner.
Were Americans of all political persuasion thinking through this matter logically and without their political biases, these numbers would cause our populace to take to the streets to demand our political leaders put our fiscal house back in order. But I don’t expect such sanity to prevail, given the highly fractured and partisan age we live in along with the apathetic attitude of citizens.
But at least now YOU know that there is another aspect to the refugee crisis that no one is mentioning. And it’s greater than the humanitarian aspect, or at least it should be, given our own fiscal crisis that few are willing to confront.
The only question now is will you care? Will you demand of your elected officials that they rein in our spending, both in the refugee resettlement program and across all areas of our government? And will you share these facts with others?
As Donald Trump readies to take the oath of office next week, he will not only assume charge of the most powerful nation in the world, but he will also oversee the world’s largest economy. And Trump will be aided in his oversight of our economy by a Congress controlled by a Republican Senate and Republican House.
It’s been ten years since our nation was led by a Republican-controlled trifecta (Presidency, Senate & House). The last time this occurred George W. Bush was President. When the “conservative” Bush left office in 2009, with Republicans having controlled the Senate and House for half of Bush’s eight years in office, our 43rd President had doubled the national debt to just over $10 trillion with his deficit spending policies.
Eight years later though, as Barack Obama is leaving office, our published national debt is on the verge of surpassing $20 trillion. (I say “published” debt since our unfunded liabilities exceed $100 trillion, a topic that I discussed in my previous article, American: The Point of No Return?) If ever there was a financial house that is spinning out of control, it is ours.
Many in America are hopeful with our new President about to take office. Trump’s no-nonsense, tell-it-like-it-is attitude attracted tens of millions of voters to support him. His willingness to say what many were thinking no doubt won him the election. Further, Trump’s 50 year track record in business convinced many voters that he was the man to turn around our economy and create a thriving, fiscally sound America.
Donald Trump: The $10 Trillion Man?
But this last week, Senator Rand Paul took to the Senate floor to rail against his own Republican colleagues as seen in this powerful video. According to Paul, under the plan to repeal Obamacare, Republicans will likely be voting in favor of a budget that would increase the nation’s debt by another $10 trillion over the next ten years, matching Obama’s own dismal performance. This slide from Paul’s presentation illustrates the point the Senator was making.
Senator Paul began his speech with the famous lines, “the more things change, the more they stay the same.” And he could not be more accurate. For all the talk of “draining the swamp” in Washington, what may stay the same, based on Republican’s track record, is the unwillingness of Republican politicians to stem the growth of our dangerous national debt. (To be fair, some are suggesting that this “shell” budget will be replaced with a second one in the not too distant future, which will bring spending down and ultimately balance our nation’s budget. But that remains to be seen and should be viewed with extreme skepticism.)
Republicans were fond of lobbing threats of government shutdowns, making incessant demands for balanced budgets and excoriating Obama and Democrats for their own deficit spending during the Obama era. And rightly so. But now that they are in the drivers seat, is it actually possible that Republicans will do no better? Will they maintain the fiscally ruinous course upon which our nation is set?
Where are the Tea Party & Fiscal Conservatives?
Eerily silent as the Republicans take control of Washington, are the groups that heretofore have been the voices of fiscal reason, and have historically led the way in demanding that our elected officials spend no more than they collect in revenues. And their silence is deafening.
The tea party movement, of which I have been an active part since its founding in 2009, all but abandoned its defense of fiscal soundness, during the general campaign in 2016. Tea Party Patriots, the nation’s preeminent coalition of tea party members and groups, and many other conservative watchdogs, said nothing about Trump’s calamitous economic plan. This despite the fact the new President’s plan could add up to $20 trillion to our nation’s debt, according to a recent study by Committee for a Responsible Federal Budget. Their report revealed that our nation’s federal debt would soar to $39.5 Trillion by 2026, double the current debt.
But now the day has arrived and Donald Trump and his Republican allies have been handed Washington to them on a silver plater by frustrated and angry voters. Those voters elected Trump because of their disdain for politicians who consistently promise one thing but deliver something altogether different.
A Call to Action
We’ve all been told, “it matters who governs.” But it will only be true if grassroots Americans do more than simply vote. They… or we must remain engaged. Our voices must be heard in an unprecedented, unmistakable, and unambiguous manner! Trump and our Senators and Representatives must know that they were not elected to maintain the fiscal status quo.
The Tea Party, and all fiscally conservative Americans, must, like Rand Paul, call out Republicans and Donald Trump. We must warn them that they were not elected to put the final nail in our fiscal coffin.
Trump cares not about the media, the social elite, the Hollywood snobs, or the connected wealthy, as he once again reaffirmed this week in his most recent press conference and barrage of tweets. But I do believe there is one demographic to whom Trump will listen: the grassroots, the blue collar workers, the forgotten middle class, and the traditional American, who still believe that if you work hard and play by the rules, you will be rewarded.
So it is incumbent on you and me to reach out… once again, to an elite ruling class. It is necessary for us to remind them that we sent them to Washington to repudiate the status quo by restoring fiscal responsibility; honoring the Constitution; and empowering the free market. Reestablishing these three pillars, which are the core values of the tea party movement, will enable our great ship of state to slowly but surely reset its course in the direction of real prosperity, the kind that our Founding Fathers envisioned. But as we do the work to reshape our nation, let us never forget that fiscal prosperity will only flow from men and women of decent, moral character. And we will only “Make America Great Again” if we first Make America Good Again, as I discussed in my previous article of the same title.
So will you join me in engaging with our elected officials? Will you pick up the phone and call, or fire off an email to Donald Trump, your Senators & Congressman to express your views about the upcoming budget battles? I trust you will. (Click on the highlighted links for their contact info.)
With the election of Donald Trump, roughly half of Americans are hopeful, while the other half are dejected, if not alarmed and angry. While that may be a slight overgeneralization, we can probably all agree that the campaign leading up to the Presidential election was one of the nastiest in recent history, characterized by intense personal attacks, with little attention given to the many challenges our nation is facing. One such challenge is our exploding national debt and its dire implications for you and me.
As someone who has been a fiscal conservative all of my adult life, I was sorely disappointed to see such little attention given to the financial welfare of our nation. With our nation approaching $20 trillion in current debt, it should come as no surprise to anyone that a financial storm, like none we have seen, is likely in our future. Yet, neither Trump nor Clinton spoke much of our debt. When it was mentioned, it was simply noted in passing, with no plan by either candidate to halt, much less reverse, the current course we are on.
While it’s understandable that neither candidate was interested in tackling America’s festering cancer, what is alarming is the fact that many of the organizations who have typically decry our national debit, remained silent during the campaign. As the founder of the Chattanooga Tea Party, our organization locally, along with the national tea party movement, has consistently focused on fiscal issues over the last seven years. Likewise, the Republican Party has historically been the party of fiscal responsibility, if not in action, at least in words.
Yet nationally, both the Tea Party and the Republican Party said very little about the silence of both Hillary and Trump concerning our fiscal nightmare.
With reference to our national debt though, the old adage, ignorance is bliss, does not apply. In fact, choosing to ignore what is certain to cause calamitous events in the not too distant future, is akin to knowing one has cancer, yet discussion of the illness is avoided, hoping it will somehow go away.
So just how bad is our fiscal cancer?
Just as a picture is worth a thousand words, the following three charts illustrate the magnitude of our $19.5 trillion debt. To be certain the terms are understood, deficits are the annual differences between what our government takes in versus what it pays out, or spends. The gross debt is the cumulative sum of those annual deficits.
Chart #1: The Gross Public Debt from 1980 – 2016
Chart #2: The Federal Deficit from 1980 – 2016
Chart #3: Trillion Dollar Deficits Return by 2024
As the charts depict, for decades our nation has been spending well beyond its means. In fact, during the last two Presidential administrations, the US incurred an approximate $15 trillion of new debt, with nearly two-thirds of that amount being added during the Obama era.
According to an article at Visual Capitalist, our national debt is:
Larger than the 500 largest public companies in America.
Larger than all the assets managed by the world’s top seven money managers.
25x larger that all the global oil exports in 2015.
155x larger than all the gold mined globally in a year.
Larger than the sum of the world’s physical currency, gold, silver, and bitcoin combined.
But as troubling as this should be to any American, the future looks even worse according to the Congressional Budget Office (CBO) projections, as presented by the Committee for a Responsible Federal Budget. CRFB is a nonpartisan, non-profit organization committed to educating the public on issues with significant fiscal policy impact.
To quote CRFB, “under CBO’s current law baseline, annual deficits will return to trillion-dollar levels by 2024. Under a more pessimistic Alternative Fiscal Scenario in which policymakers fail to pay for new spending and extended tax cuts, trillion-dollar deficits return to 2021 and reach $1.5 trillion — a nominal-dollar record — by 2026.”
Despite the magnitude of our debt, there have been some who have suggested that our soaring debt is no big deal. Rather, they have asserted that debt is good, particularly when interest rates are at historical lows.
In contrast to that view though is that of Admiral Mike Mullen, former Chairman of the Joint Chiefs of Staff, who in 2011 stated,
“the single, biggest threat to our national security is our debt, so I also believe we have every responsibility to help eliminate that threat. A nation with our current levels of unsustainable debt… cannot hope to sustain for very long its superiority from a military perspective, or its influence in world affairs.”
Every budget is finite, even one as large as our federal government’s, which is now approaching $4 trillion per year. So as certain components of that budget increase, they either crowd out other line items or they demand greater borrowings to meet the shortfall caused by deficit spending.
Our nation has enjoyed historically low interest rates for a number of years. But when those interest rates invariably rise, so will interest costs. In fact, the CBO projects that those rising interest rates over the next ten years will increase the federal interest costs from $223 billion in 2015 to $839 billion in 2026. This will lead to fewer dollars available for other essential government programs, including the military, Medicare, Social Security, infrastructure and more.
Chart 4: Projected net interest expense, in billions of dollars & as a % of total outlays
So just how does a government that has an insatiable appetite for spending, and has shown no restraint to borrowing funds, affect ordinary citizens like you and me? Here are just a few of the ways:
Economic growth is threatened as national debt increases.
Wages are depressed and the availability of jobs is minimized.
The stability of Medicare, Social Security and Medicaid is jeopardized.
Personal costs of living increase as interest rates on individual credit ratchet up.
Burden for repayment of nation’s overspending today will be heaped on our children and grandchildren tomorrow.
As debt increases and spending accelerates, likelihood of another financial crisis increases, endangering personal wages, jobs, and investments.
As I mentioned at the outset, half of Americans are hopeful and even optimistic about what a Trump Presidency portends for the days ahead. But with great opportunity comes great responsibility. So as Republicans maintain control of both houses and gain the White House in January, how will they behave? Will they move the country forward in a manner that acknowledges the threat of our growing debt? Will Republicans guide our government and nation back in the direction of fiscal solvency? Or will their new found status in Washington reveal what they have done for too long now, campaign on grandiose promises that fall short on delivery?
Time will tell. But one thing is for certain, the longer our fiscal cancer is ignored, the more likely the ultimate diagnosis will be one from which we may never recover. If you care to weigh-in on this matter, be sure to let your Congressman and Senator know that you expect them to support plans that will move away from deficit spending and toward a balance budget. While it cannot be done overnight, the road back to fiscal responsibility must begin in 2017 under a Trump administration.
Addendum: While this article focused on the current portion of our national debt, there is a much larger amount that receives very little attention, referred to as the nation’s “unfunded liabilities.” These amounts total in excess of $100 trillion and represent the sum of the various obligations that will come due over the next several decades, predominantly made up of Medicare and Social Security, as the demographics of our nation continue to age out and draw more heavily on these programs. To find out more about this avalanche of debt, google “unfunded liabilities.”