And to draw, dear reader, what I think are critical relative comparisons, look at who’s in that ring of fire alongside the U.S. There’s Japan, Greece, the U.K., Spain and France, sort of a rogues’ gallery of debtors. Look as well at which countries have their budgets and fiscal gaps under relative control ”“ Canada, Italy, Brazil, Mexico, China and a host of other developing (many not shown) as opposed to developed countries. As a rule of thumb, developing countries have less debt and more underdeveloped financial systems. The U.S. and its fellow serial abusers have been inhaling debt’s methamphetamine crystals for some time now, and kicking the habit looks incredibly difficult.
As one of the “Ring” leaders, America’s abusive tendencies can be described in more ways than an 11% fiscal gap and a $1.6 trillion current dollar hole which needs to be filled. It’s well publicized that the U.S. has $16 trillion of outstanding debt, but its future liabilities in terms of Social Security, Medicare, and Medicaid are less tangible and therefore more difficult to comprehend. Suppose, though, that when paying payroll or income taxes for any of the above benefits, American citizens were issued a bond that they could cash in when required to pay those future bills. The bond would be worth more than the taxes paid because the benefits are increasing faster than inflation. The fact is that those bonds today would total nearly $60 trillion, a disparity that is four times our publicized number of outstanding debt. We owe, in other words, not only $16 trillion in outstanding, Treasury bonds and bills, but $60 trillion more. In my example, it just so happens that the $60 trillion comes not in the form of promises to pay bonds or bills at maturity, but the present value of future Social Security benefits, Medicaid expenses and expected costs for Medicare. Altogether, that’s a whopping total of 500% of GDP, dear reader, and I’m not making it up. Kindly consult the IMF and the CBO for verification. Kindly wonder, as well, how we’re going to get out of this mess.
Please take the time to read it all and examine the chart closely. The only difference on this between Mr. Gross and myself is that I believe he understates the problem with the 60 trillion dollar figure. As has been discussed on the blog in the past, the correct figure may be as much as three plus times that amount–KSH.
As someone with little to no understanding of economics, and who literally has no money (I do not say that figuratively. I own nothing at all, no house, no land, no stocks, nothing), who has no retirement plan (death is my retirement plan), nothing in the bank, who works part time and each paycheck does not cover all my expenses, I have heard many times and read many articles about this impending finanical doom on a global level. My question is: what am I supposed to do?
[i]Kindly wonder, as well, how we’re going to get out of this mess[/i]
I hope more and more people are waking up to the very real possibility that we will NOT get out of this mess. When you look at contemporary basket cases like Greece and Spain, you have to ask: are we looking at our future? Or, could it even be worse than that [German Weimar republic].
Many politicians [Dems and Repbubs] talk as if our future choices are the status quo or “demonic” cuts in the safety net. Those really aren’t the choices. Status quo is dead, not today but it is coming. A plan like Paul Ryan’s [also demonized as radical] maybe way too little too late.
Only real constitutional conservatives are advocating a return to the limited form of Central Government enshrined in the Constitution. Most Americans wouldn’t recognize that form of government; and certainly can’t imagine the vast expansion of personal freedom that would entail.
I hope folks are thinking about how to prepare for the worst.
#1 Having been there when my 4 kids were small, I have this comfort for you: when you pray, “Give us this day our daily bread”, fully knowing that if He doesn’t, there won’t be any, He does come through. It is like manna in the wilderness, enough for the day, but not enough for the morrow…with exceptions. God bless you!
#2 Unfortunately, as there is very little “will” to do so – we are not going to get out of this mess. Czarist war bonds are of value to collectors of such things, as are real Confederate dollars; but have no transcational or intrinsic value.
My question is simply this: what do you consider “the worst” and how are you “preparing” for it?
DaveW, the only things I can think of to say to you that may be worthwhile [other than praying and getting close to Jesus, which applies to all of us]:
— attempt to vote conscientiously while recognizing that . . .
— it’s up to you to try to make the best of what promises to be a very painful situation and that probably the government will not reform its contemptible and corrupt actions so it really is up to you
— for inspiration on taking care of yourself to the best of your ability I like listening to Dave Ramsey and implementing as much of his advice as I can
— gather your posse around you of good loyal friends and family and church members on whom you can depend
— what you finally make beyond what you need to take care of yourself, use a part of to take care of others, which is a great privilege of making a bit more.
God bless you.
What is so frustrating is the steady drumbeat from the liberal/progressive side that there is nothing to worry about and the instant demagoguing whenever there is anything said that seriously addresses the issue.
I think that this will only be addressed when there is total collapse and blood in the streets.
Carl+,,,,,,what do I think the worst is? I don’t know, but when you look at all the problem areas, it could be pretty bad if several things hit us from different directions at once.
Like #6 says, total collapse and blood in the streets, as things get sorted out. If radical Islam is part of what is getting sorted out, I think it will be real bad.
As far as preparations? Trying to make sure as many family members, friends, neighbors, and parishioners are as aware of the issues as possible. Just being mentally aware is a big step forward. Trying to discern with specifics how the church will continue to be a place of hope and comfort during difficult times [including studying how churches in Africa and the middle east continue to minister]. Those are some of the biggies for me.
Subscribe. Prayers for #1. Prayers for our country.
#7 At the beginning of September in response to requests to address what the majority of our small congregation sees as an increasing time of troubles, our Sunday morning “adult ed” time has been devoted to a study of “Hope and Suffering”. My research in Scripture and History in preparing the “course” has led me to relate to Jeremiah in a much more personal way; to grieve over my own laspes in virtue; and to pray that God will yet at this late date, guide history by using America in a positive way, rather than negative. Yet, there are limits to His patience.
The sad fact of the matter is that the point of “no return”, at least in terms of the soundness of our monetary system, has most likely been passed; but has yet to manifest itself except as a continuing decline in real purchasing power.
Thank you for the reference to Jeremiah, it has been on my list of things to get to. Given your testimony, it will move way up the list. I too think we have passed the tipping point monetarily. And despite many warnings, it is going to be a huge shock to so many.
I fear there may be another tipping point and that is the ability of the Church to affect the morals of the younger part of the populace or to even think of God other than the image of the thereputic God [He solves my problems but I have no relationship with Him].
Interestingly enough, my wife is taking a Contemporary Ministry class here at Nashotah and the whole subject of reaching the 35 year olds and under is just depressing. Much as 9/11 filled the churches [for a brief while], it may take another major catastrophe to shock society to think seriously about faith.
Bill Gross is well known in the financial services industry as a gentleman who does not exaggerate. This is chilling.
I am quite saddened that due to the fact that my wife and I have saved long and hard all our lives, we will likely end up paying extra for those that have NOT done the same. ‘Means testing’ for benefits will probably eliminate a moderately significant portion of the things we had planned on aiding us in our our ‘golden years’. It is especially annoying when our government continues to shell out largesse to all, while vilifying the folks who actually are paying for that largess, or (like me) who have saved all their lives for ‘not paying their fair share’. My concern is that in this day and age we will end up with riots in the streets over government spending (ala Greece). So I have stocked up on things to protect myself and my family (ammunition, food and water). It scares me that in a previous era I would called someone who stockpiled these things a ‘survivalist’, and that I actually am concerned that it may be required. I keep having visions of the small store owners in California during the Rodney King riots trying to defend their property and failing….
I have long advocated the cessation of all foreign aid with the express exception of those countries who have shown a real need for our help……and you can probably count them on the fingers of one hand. Unearned Social Security benefit payments are another sore point with me, and the savings which could be generated by stopping them could run into millions of dollars.
Some real savings are now in place defense-wise, however, and as an example of such savings, some U.S. military and naval installations are now under joint use, such as the bases in Hawaii. Naval Station Pearl Harbor/Hickam AFB is a good example of this, and there are more coming down the pike. Duplication of effort and missions have long been a problem in the military, and they are finally being addressed. I don’t see any radical change coming in the status of our armed services, however.
Smaller, leaner, and meaner will no doubt continue to be the case, but even then, you can cut only just so much without causing real damage to the defense of this country. We can’t afford this, and I say this as a retired career service member. Yes, our government [i]IS[/i] spending us into oblivion, but this will happen only as long as we citizens [i]LET[/i] it happen. It’s time to ‘lean’ on Congress and the President (whoever he will be), order them to get busy.
The gasoline of runaway inflation has been spilt on the floor. Sooner or later a flaming match will come along.
Be ready for a can of green beans to be worth more than an equivalent weight in gold.
RE: “‘Means testing’ for benefits will probably eliminate a moderately significant portion of the things we had planned on aiding us in our our ‘golden years’.”
Tomb01 — as somebody who will probably never be “means tested” out of SS, I heartily agree with you. “Means tested” is another phrase for “we are stealing [i]even more[/i] of the money that people whom we currently deem ‘the rich’ were forced to give to Social Security back when they were younger.”
If people paid into SS [through forced extraction by the State] they should receive the full package, full stop, end of story. They can never receive back the money they would have received had they been able to properly invest that money or spend it. It was stolen from them. But enacting “means testing” to steal a second time — just appalling.
Oh that those of us under a certain age could be allowed to opt-out of the Federal system as certain others were allowed to.
15. Sarah, several years ago, the Veterans’ Administration started requiring ‘means testing’ of veterans who were not retired service members and who are not rated as disabled by the VA, as I am (100%). Most of them are covered by their own insurance, and their carriers are billed by the VA, or they’re covered by either MediCal (here in California) or by Medicare.