I’m a little concerned about the National Debt today – this is what happens when you start reading world financial news reports, which is why I usually don’t, it’s so depressing!
Just 5 years ago the National Debt was $5,700,000,000,000 (5.7 Trillion) and was being paid down at a rate of about $300M per year. Forecasts were that we would be debt free perhaps as soon as 2010.
That didn’t seem like such a good idea to George Bush. He said, wouldn’t you rather have a $300 tax refund? Apparently everybody did, because we kicked that gloomy Al Gore out the door with his ridiculous concerns about conserving energy and putting some of our surplus (huh, what’s that?) aside to protect Social Security benefits and Medicare – what a loon!
I mean really, oil was just $25 a barrel – what was conservation really going to accomplish? In fact, oil had run all the way down to $15 in early 1999 on speculation that Al Gore would be the next President but it quickly picked up to $30, peaking when the supreme court decided Bush had won the election but it dropped back to $20 in the Summer of 2001 (buy on the rumor, sell on the news). 9/11 actually caused oil to drop $2.50 over the next 3 months as the economy slowed and demand was destroyed but the war turned that right back around and oil is up 300% in 4 years.
Our Social Security/Medicare crisis is a whole other problem you can read about elsewhere but I do have to laugh when Bush wags his finger at companies who have underfunded pensions. He is running a pension that is underfunded by the entire GNP of any 2 other countries on the planet!
But I’m not here to criticize our fine government or to engage in conspiracy theories, there are plenty of web sites for that (and I’m scared!). What really worries me is that Congress is about to run into that pesky debt limit that was set up to make us spend responsibly. The great thing about being Congress is that if you don’t like a rule, you get to change it, so expect yet another amendment allowing us to increase the National Debt yet again before the year is out.
That will bring the grand total to over $8,200,000,000,000 (8.2 Trillion) an increase of over $26,000 for each working person since Bush took office. That’s a 30% increase in just 5 years! That’s $26,000,000,000,000 dimes closer to a real problem!
How much of a refund did you get? Did it balance against the increased local and state taxes which were increased to offset cuts in Federal support? If all 100,000,000 of us working folks who took on $26,000 in debt a piece didn’t get it back from Uncle George, where did it go?
Does it really cost $600+Bn a year more to run the government now than it did in 1999? If so, why does the government keep cutting taxes? If I run a business and costs keep going up and I keep lowering prices I may run into a problem at some point.
So what’s a few Trillion between friends you ask? Ordinarily, I wouldn’t care, think of Trump living it up through 3 bankruptcies – not a problem… But something was pointed out in the Financial Times that really bothered me. We terminated the 30 year notes back in 2002 and now the average maturity of our $8T debt is down to 3 years. This is like being unable to have a 30 year mortgage on your home, you don’t know what you will have to pay next year!
This is a recipe for disaster of biblical proportions should foreign countries/investors stop buying our short bonds so cheaply (inverted yield curve) or if foreign central banks stop depositing (like loaning but less embarrassing for us) $12Bn a week into the fed.
Our employees sense a problem and they are looking for work elsewhere, just in case we start bouncing the checks.
I don’t mean the millions of engineers and highly trained professionals that no longer come to our country looking for work or the jobs that we now accept getting outsourced around to globe. Think bigger… The “employees” of America are it’s corporations, who produce things for us and sell things, taking their salaries (profits) and giving us a cut in the form of taxes.
Just like a company provides a safe and productive working environment for its employees, our country needs to do the same for its corporations. There are already signs, aside from the obvious outsourcing craze, that many major corporations are looking elsewhere for their future prospects (expansion) but I think we are approaching the point where some of them may just quit on us and leave the country to go work somewhere else.
http://www.opinioneditorials.com/guestcontributors/dgrassi_20051207.html
How long before multinational companies decide that being an “American” company is no longer a benefit? Our major corporations are already used to having their restaurants bombed, their executives kidnapped and their goods or services boycotted by angry foreigners who don’t like our policies. If that is topped off by rising interest rates and a devaluing currency, I think we will actually start seeing a few companies relocate entirely.
This will, of course, exacerbate the trade deficit and initiate a very nasty downward cycle so I’m going to put my head back in the sand and hope it doesn’t happen. I will also be watching the dyke for the first signs of a leak but don’t expect me to put my finger in it, I’ll be too busy looking for a nice international location to relocate to!
