We’re Beyond Deficit Reduction
There is a lot going on, externally there is Ebola, ISIS, Stranded Refugees on an Iraqi Mountain, Syrian Civil War, The Israel & Hamas War, Afghanistan, and we can’t forget about the Nigerian girls that have been kidnapped.
Internally there’s the IRS Scandal, Fast & Furious Scandal, Children Crossing the Southern Border, Obamacare, the Benghazi Scandal, the CIA Spying on the US Senate.
Locally School is Back in Session, and we have Traffic, Work, etc..
I get it – there is a lot going on but if there is one topic that has somehow dropped off our radar – it’s
DEBT REDUCTION!
Notice that I didn’t say deficit reduction, as a country we are way, way beyond that discussion.
Look at the chart below. This is the rate of growth of our total US debt.
Source: Treasury Direct
I’m a business major and it appears to me that the total US debt is rising at an increasing rate. I’m pretty sure we could apply the exponential function to this chart where “x” = date and “Y” = total debt. Using this function we will see that debt is increasing faster and faster as we move forward in time.
Chart – View of the Exponential Function
Source Wikimedia Commons
Now before we all start screaming about who’s fault it is let me point to the graph below, even in the recent best years for “deficit reduction” under Bill Clinton’s Presidency the total debt went way up.
It’s worth mentioning, I believe we even had a revenue surplus during his Presidency yet the debt still went way up.
I’m not picking on any President, I’m not promoting any politician, I’m just saying we are very close to the Uh-Oh point. Once the tangent of the soon to occur exponential slope is hit I don’t believe there will be a way to turn back.
Source: Me, hand drawn, not scientific, not to scale!
We hear politicians talking about putting the national debt on the backs of our children but if we hit the Uh-Oh Point the only way out of the debt will be A: Default or B: Inflate our way out.
Now being a 53 year old male getting close to the retirement age, neither of those two options are great but “B,” B will absolutely kill the Baby Boom generation. The hyper inflation it will take to get the debt in line (i.e.: back to a 1950’s, 60’s, and 70’s trend line ) will hit smack in the middle of the Baby Boom Retirement.
Stop thinking about placing the debt on the backs of our children’s, children and start thinking about old people on the street begging for bread – IN ABOUT 20 SHORT YEARS!
As a small business owner, an arm chair economist, I’m sure the politicians will shrug this away with “debt as a percentage of GDP,” or even funnier President Obama telling us how fast the deficit has declined during his watch.
The American Public needs to be aware that the Uh-Oh Point is very close, I’m not sure how the graph can be reversed or if it can even slow down at this point. The graph is clear… Debt is rising and in a few years it will be rising at an exponential rate.
The time to ask our politicians what their DEFICIT REDUCTION PLAN is over, way over; today it’s time to demand they lay out their DEBT REDUCTION PLAN!
2 Comments
I think 20 years as an “uh, Oh” point is way too conservative an estimate. I think we have 5-7 years and much is riding on who gets elected in November and 2016. If we elect Establishment Republicans or Democrats to Congress AND a Democrat in 2016, we are done. We need fiscally conservative leaders with the courage to stand up to the media assault that will surely come their way in order to reverse course. When I see how the GOP consistently caves and votes to raise the debt ceiling, I don’t believe the party elites having the will or intestinal fortitude to do so. Unfortunately, the GOP elites are trying to destroy anyone in their party who wants to truly address this issue.
The key to all of this was mentioned in your statement that the American people must “wake up.” This is the biggest challenge we face. Politicians have successfully polarized the country to the point where too many of us place our political affiliations over the welfare of our nation. I believe this began under the Clinton Administration. Politics has always been a rough game but Clinton employed Alinski methods to destroy opponents on a personal level. The days of Tip O’Neal and Ronald Reagan were clearly over and this personal hatred filtered down to the electorate. This is especially true on the left. I am stunned when I hear otherwise rational people actually believing that the GOP wants to starve children, or pollute the planet.
In short, I am not optimistic that enough people will wake up in time to reverse the damage. I have intelligent, liberal friends who believe the Republicans are evil yet they are blind to the fact that one day the GOP will be running their health care, NSA, IRS….They cannot see that the power they are willing to give their party will eventually be turned over to the party they believe to be evil. I never get an answer from my liberal friends when I bring this up. They always try to change the subject. I hope I am wrong but I think most people will continue to participate in their mass denial fest until something truly catastrophic occurs. Hard to get happy after that comment, huh?!
It is hard to get happy after that; what really bugs me is that even during the debt ceiling debates no one brought up the trend line. What media outlet accurately spelled out the upcoming problem?
Example from the Right: On the Fox News 2/14/14 article they spell out how hard it is to get consensuses on any debt deal but they (fox) does not talk about the actual debt at all (http://www.foxnews.com/politics/2014/02/10/house-gop-leaders-unveil-debt-ceiling-plan-that-would-undo-vets-pension-cuts/)
I don’t remember anyone actually assigning a year that the debt becomes unmanageable. We hear dates for Social Security and Medicare solvency, but no one is looking at total debt. I believe it is going to hit us quick and hard when it finally happens.