REALITY CHECK Preparing For The National Debt-saster

REALITY CHECK Preparing For The National Debt-saster

As you have probably read in the mainstream media or noticed in the left column of this website, the U.S. National Debt has now surpassed $16,000,000,000,000!!  Yes, that’s 16 TRILLION dollars, 16 followed by 12 zeros!!  The number itself is staggering but the collective “shrug” of the populace concerning this outrageous profligacy is appalling and indicative of two things.  First, it demonstrates how utterly incapable a very sizable majority of the populace is with fundamental mathematical and economic principles.  Second, it emblazons the entitlement mentality across the sky in astronomical proportions!

A million seconds is 13 days.

A billion seconds is 31 years.

A trillion seconds is 31,688 years.

via Million, Billion, Trillion.

My conversations with a wide variety of people concerning federal spending make it abundantly and infuriatingly clear how pathetically inept people are with rudimentary mathematical concepts such as (gasp!) multiplication and exponents.  Far too many “citizens” and “voters” the seem to think that the primary difference between a million, billion and trillion is merely a spelling issue involving the letters ‘M’, ‘B’, and ‘T’.  There is little comprehension; much less appreciation, for the Reality of the thousand times each is multiplied to change that one little letter!  Most people can grasp the impact that winning ‘The Lottery’ (Definition:  a self imposed tax operating as a long-odds gambling scheme disguised as a ‘game’ to the “math challenged with the odds of winning roughly equivalent to the odds of being struck by a meteor) would have on their lives.  However, very few comprehend that 16 BILLION equals 1,000 winners of such a jackpot.  Assuming a two week cycle to reach a 16 million plus jackpot it would take ~40 years to have 1,000 jackpot winners in any game and pay out 16 billion.  For our hypothetical winners to collectively win 16 Trillion dollars the game would have to go on for an additional ~40,000 years.  This is just one way of trying to conceive of the number representing our current national debt.  These are numbers that the “average voter” cannot comprehend and therefore has little concern about.

Roger's Reality CheckPresident Obama has increased the debt by a mind boggling 51%, so far, during his first term.  He and his allies, spineless supplicants, and political whores of both parties have added more to the debt in just 4 years than the first 42 Presidents amassed in over 200 years, including fighting two World Wars!!  When the current occupant moved into the oval office the national debt stood at an astounding $10.6 TRILLION, yet as of this Monday, just as President Obama is about to accept the Democratic nomination and seek reelection, the debt reached $16 TRILLION an increase of $5.4 TRILLION which is growing larger by the second!!

Aside from the astronomical, super-nova size of the national debt the much greater concern is to whom those IOU’s for trillions upon trillions of dollars are owed.  It is popular for people and especially politicians (arguably also people) to lash out at “the Chinese” for OUR national debt!  Smugly, self righteously and xenophobicly lashing out at (presumably) the Chinese government for funding U.S. government spending is clearly akin to the alcoholic railing against Budweiser, Bacardi and Cuervo for manufacturing booze or the obese who rant about McDonald’s and Dunkin Donuts cooking food which the person can simply chose not consume.  This societal lack of personal responsibility has morphed into an absolutely ‘acceptable’ form of denial, excuse making and blaming something else for failure (Andrew’s Note:  External Locus of Control is something we used to encourage children to outgrow).  It follows then that no politician or government will take responsibility for over indulging in debt when those in office epitomize the pathetic self excusers.  The Reality is that the largest creditors for most of the U.S. National Debt are not foreign governments.  The Chinese hold just $1.16 trillion, the Japanese hold $1.12 trillion, private investors in the U.S. hold nearly a trillion, numerous other governments and foreign entities hold trillions more yet the single biggest “lender” of money to the U.S. is THE U.S. government!!  Almost $5 TRILLION of the total debt is held by the Social Security “Trust” Fund and federal employee and military pension systems (Andrew’s Note:  Oh Crap!)!  This should NOT make people in this country feel better about our national debt situation!!  Far from being preferable to another country or even institutional investors holding those IOU’s, this is money “borrowed” from itself!  The government that already doesn’t have enough money to pay all of its existing bills borrows money from the government that doesn’t have enough money to pay all its existing bills!!  Loaning yourself money for bills you can’t possibly pay is not bad accounting, bad business, bad policy or bad logic, it is pure LUNACY!  It is very well known that Social Security is nearly insolvent!  It will need to borrow money to pay out benefits in just a few years and so in what multiverse does it make an iota of sense to lend money from a nearly bankrupt entity to another insolvent entity??  Only within the rarified stupidity chambers of Washington D.C. could such a scheme exist!!

This situation is not sustainable and the reckoning will come upon EVERYONE in this country.  The implications are many but hyper inflation, significant civil unrest as the masses now utterly in the grip of Maslow’s Hierarchy of Dependency find themselves without the many, many handouts they are ‘entitled’ to receive as well as energy and food shortages are the more desirable issues, chaos is a very Real possibility!

Now is the time to prepare for the National Debt-saster because that is your Reality Check!

Roger

Andrew’s Note:  Because the risk involved has scared away so many investors, The Fed has begun buying up huge amounts of U.S. Debt.  According to the Wall Street Journal The Fed is buying up to 61% of U.S. Government debt.   Essentially, The Fed trades IOU’s to the Treasury Department in exchange for debt instruments…effectively printing money.  The Fed is taking this action in order to prop up the system and keep the everything from crashing down.  Can you imagine if Social Security, Government Pensions, Government Purchasing, EBT Cards, Medicare Benefits and Government Salaries went unpaid for even a few days?  Final thought, a private accountant doing books the way our government does would be in government funded jail faster than you could say Ponzi Scheme.

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One Response to “REALITY CHECK Preparing For The National Debt-saster”

  1. Tim says:

    The people don’t really understand just much debt 16 T really is. If they did they would be a lot more worried about it. Not only is the debt HUGE, it is growing at a rapid rate.
    We have to pay hundreds of billions in interest payments every year and as the debt grows so do the interest payments. Actually we have to borrow money just to pay the interest on the growing debt we already have! They can play all the shell games they want but at some point there will be a sudden and massive correction. Dollars are not safe.

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