If you have been paying attention, you know that there is a crisis in our government right now that everyone in there acknowledges.
Our government (and our country) is facing three immediate crises that overshadow just about everything else: Obamacare, the deficit, and the debt.
Obamacare is getting the most attention right now because it is being sold as a choice between either funding it or shutting down the government. At first glance, it looks like the Republicans will take a beating on this because the messages that the public is hearing from the media are the wrong ones.
I believe that shutting the government down is a very real and even needed possibility, but it needs a little more public warning and education. So this is probably not the best time, but a few months from now could work.
The immediate crisis at hand is that our government will soon reach the debt limit, i.e. the amount of money that it can borrow to keep running. It is already 17 trillion dollars in debt, and it wants to raise that limit so that by the time Obama leaves office (if he lasts his full term), our country will be over 20 trillion dollars in debt.
Does anybody see a problem here?
And so, because even those who want to keep spending more money than there is know that something is wrong with this, they are doing several things that they don’t want you to know about.
First, they are printing money as fast as they can, about a trillion dollars a year. The reason they will give you is that they believe, or say, that this will stimulate the economy and create jobs. It hasn’t been working, but they will keep on doing it until the economy either gets better on its own in spite of their efforts, or until there is a major change in who is running the country.
Some of them may believe this, but the bigger reason is that this will decrease the value of the dollar (and thus the true amount of all the debt they have incurred so far.) Of course, this will also decrease the value of all of your bank accounts and your paycheck.
That is also a main reason for the price of everything going up. The official rate of inflation won’t show this because the government learned a long time ago not to include a lot of the things that are going up (so that the rate will appear less than it really is.)
The second thing they are doing is keeping interest rates low. When they have debt, they have to pay interest on it; and this way, the amount of money the government owes on its debt is lower than it would have been otherwise. But, of course, that means that all the money you have saved will not get much interest either. In the past, people used to be able to live off their interest. But not anymore, or at least until different people are running our country.
They are also using this money to buy our government’s debt. That’s like paying off a credit card with a credit card.
The Republicans in Congress are willing to raise the debt ceiling in the mean time, let the government continue spending at the current levels for a while, and will not allow any money to be spent on Obamacare. They want the Democrats to have to choose between either abandoning Obamacare or shutting down the government.
But the fact is that our country is riding on an express train, and the bridge is out. We don’t know how much farther it is to that bridge, but we will get there if we don’t stop the train and change course.
The reason that the United States has been able to borrow so much for so long without serious repercussions is that the dollar is the world’s reserve currency. A lot of world trading uses dollars. But that is changing, as the rest of the world sees us printing money and devaluing the dollar. Why should they buy our dollars when its value keeps shrinking?
England used to have the world’s reserve currency, but they lost it when they had so much debt after World War 2. So our being the world’s reserve currency is not cast in stone. A lot of nations now are circumventing that, and it is only a matter of time before it is official.
When that happens, the recession of 2008 will look good by comparison. The depression of the 1930’s will look good.
If we wait too long, it will be the presidential election season; and that will not be a good time to have this conversation. Actually, the best time is now, when we are at least a year away from the next midterm election.
Choose a date. Any date.
Let it be known that after that date, there will be no more debt limit increases. None. Somebody has to say “$17 trillion dollars is enough!” If we wait until the next presidential election, it will be over $20 trillion. If we lose the world’s reserve currency status, it won’t matter anyway. The dollar won’t be worth more than the paper it’s printed on.
Congress has to declare that this will be the sole order of business in the meantime. No more immigration. No more gun control. Until we get this thing resolved.
The government has to be cut. Entitlements need to be changed. We can’t keep financing things with borrowed or printed money.
Photo credit: Jessie Owen (Creative Commons)
Please share this post with your friends and comment below. If you haven't already, take a moment to sign up for our free newsletter above and friend us on Twitter and Facebook to get real time updates.