Can America become bankrupt?

15 09 2008

Recently I’ve been ranting about the United States’ national debt, but it was in a discussion on another blog, so you probably missed it.  I think our debt is one of the biggest problems facing our future in this country, and the politicians hardly talk about it.  Rather than balancing the budget or actually saving money to pay off the debt, we are going further into debt more each year.  And it’s not all President Bush’s fault — Congress spends money, plus the debt has increased under the leadership of both parties.

I know, some people want to brush this discussion under the rug, figuring that America will just find a way to keep going as it has been, that we’ll always be prosperous and have a strong economy.  But the government has to manage our money — we don’t have unlimited money, and we can’t keep borrowing more and more.  What happens when the lenders call for their money?  What happens when some of those lenders are from other countries (like China)?

We are seeing warning signs of economic problems, most obvious with the failings of Bear Sterns, Fannie Mae, Freddie Mac, Lehman Brothers, etc.  Inflation is increasing at an alarming rate while salaries aren’t keeping up.  (The government seems to not be accurately tracking inflation; just look at your bills and tell me it’s only 5 percent a year.)

Now I’m going to show you some figures about the national debt, and this might get scary.  So put the kids to bed so they won’t have nightmares.  The national debt is currently over $9 trillion.  (That’s not all; hold on.)  Before I expand on what that means and what it does not include, let’s look at how big $9 trillion is, because that’s a number bigger than most of us can easily grasp.

Let’s walk up to how big a trillion is.  Let’s look at it in terms of seconds of time, which everyone can relate to.  A million seconds takes about 11.5 days to pass.  A billion seconds takes about 32 years to pass.  (Don’t believe me?  Do the math.)  Next is a trillion, which would take over 31,000 years to pass.  Nine trillion seconds would take over 285,000 years to pass.  To look at it another way, if you spent one million dollars per day, it would take over 24,600 years to spend $9 trillion.  Which also means, if the government paid one million dollars toward the national debt per day, it would take over 24,600 years to pay off, and we’re not even counting the interest.  (To really blow your minds, consider how much the government paid in interest toward the national debt in 2006: over $1.1 billion per day.)

Okay, is anyone still with me?  If so, please hold onto your seat, because it gets even crazier.  (Do you think that is possible?)  The $9 trillion national debt figure does NOT include Social Security, Medicare, and Medicaid.  If you include the unfunded portions of those programs, the debt figure rises to $59.1 trillion!

Can you handle more craziness?  (Don’t say you weren’t warned.)  As you might’ve heard in the news, the government just took on the debt of mortgage lenders Fannie Mae and Freddie Mac, which includes $5 trillion in debt, but that debt is not going on the books.  That means it does not count in the national debt.  If the CEO of a publicly-traded company did this, he’d go to jail.  So why can our government do that?  I’m sure there’s some legal loophole, but that’s dangerous accounting.

So the big question in all this is: can our government become bankrupt?  That may seem inconceivable, but it happened with the Soviet Union in 1991, which was a world superpower before that.  It is hard to imagine that happening in America, but if we continue to borrow and spend money that we can’t repay, the country may eventually go broke.  What would happen then is anybody’s guess, but I suspect it wouldn’t be good.

So what can we do about it?  Not much.  But when we have an opportunity to make our voice heard, we need to inform others of this growing threat to our country.  And this issue definitely should be debated between John McCain and Barack Obama.  If this problem keeps getting swept under the rug, it may destroy the whole house.

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4 responses

17 09 2008
karenranee

This is very depressing…. Why would they keep lending money to us (the U.S.) if they know how badly in debt we are and that we won’t be able to pay all of this back for THOUSANDS of YEARS?! Have ‘they’ been planning our downfall all along or did we think of digging this hole all by ourselves? I think it would be interesting to know the debt statistics of other countries to compare this with, and also the amount (if any) that other countries may owe us. Although, it seems we’re more into giving than lending…

I really dislike being in debt… Maybe I’ll move to Australia, they seem calm and peaceful there. 🙂

22 09 2008
Beppo

I heard Glenn Beck speaking on this last week, and he figures that within 20 years all the revenue the U.S. government gets will go towards debt. Obviously that would leave no money for what the government needs to do, including national security.

18 02 2009
Annoyed American

Explain this for me.

The guv’ment says we need money.
We don’t have money ’cause we don’t have enough taxes.
We don’t have enough taxes ’cause we don’t have enough taxpayers.
We don’t have enough taxpayers ’cause we keep aborting them all.

So why should I trust a democrat to fix our woes when they are all about aborting taxpayers and therefore denying themselves the big government they so desperately want?

9 03 2009
Beppo

I heard Sen. Bayh on TV tonight, and he said the government is increasing our national debt by $1 million per minute. That is, they’re spending more than they take in, increasing the deficit, constantly. How is that fiscally responsible?

And more importantly, what will be the consequences of their wasteful spending?

BTW, Sen. Bayh is a Democrat, yet he’s voting against the 2009 Omnibus bill because it has too much wasteful and unnecessary spending. When he was a governor, he balanced the budget and left with a surplus. It’s good to see someone standing up to their party when necessary!

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