The ongoing saga about what to do with the incredibly huge national deficit facing this country boils down to one simple fact: the federal government spends more money than it takes in.
Like the family who wants more than they can afford and wants a loan—but has nothing to offer in the way of collateral— the feds go to the guy on the corner and borrow money to pay the bills.
In this country’s case, we have several “guys on the corner” from whom we borrow trillions of dollars, including China, Japan and Great Britain. To date, this nation is now over $14.1 TRILLION in their combined debt.
China is the largest holder of our economic liabilities, as they officially hold a promissory note from us for more than $800 billion. Reportedly, they have purchased more of our debt through Great Britain in recent years.
Why are our expenses so high, and why are we borrowing so much money? We are spending money faster than we can think about what to spend it on, but our tax base has also been weakened by the loss of thousands upon thousands of jobs here in this country.
About 20 years ago, it was determined by many major corporations— with the help of Congress—that products could be made cheaper in other countries, and American consumers would not only save bundles of money, but use those savings to buy more stuff.
Sounds logical, but there were pitfalls. We bought cheaper goods, but we imported more than we exported. As more and more businesses outsourced their work, the factories in America started closing down and millions of jobs were lost. Cars, clothes, appliances, electronics to name a few were made overseas.
America isn’t making enough money to support its rather extravagant lifestyle. Moreover, the government expanded entitlements to compensate those who have lost their jobs and are facing greater competition for the few jobs that are available in this country.
So we borrowed and borrowed and borrowed. Now the waiter is bringing the check, but there’s not enough to pay the bill. The warning signs have been there for years, but the federal government ignored them and chose to keep borrowing and spending, getting deeper and deeper in arrears in the process. Since we are thought to be such a rich country, the members of Congress just kept increasing the debt limit.
Some legislators now want to avoid raising the debt ceiling, believing that our lenders won’t call our bluff by calling in our loans and crippling our economy. However, major economists are claiming that allowing the debt ceiling to remain where it currently is will propel America into default, and economic calamity will follow—not just in the U.S., but abroad.
But when one thinks about it, by sending our jobs overseas and importing so many goods from all over the world, we’ve made something of an unholy barter. We sold our economic heart and soul in exchange for trillions of dollars in order to live a relatively fast and loose lifestyle.
Why should we have to pay our lenders back when we’ve given them so much for their money?
Forgive us our debt, as we would forgive theirs.
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