Today’s issue is graphic and might be offensive to some readers.
But it’s the most serious topic of our time and it deserves your attention. It’s more serious than the variety of wars we’re fighting at home and abroad. It’s more serious than a stock market crash or a housing crisis.
In fact, it could be argued that this top issue is a major underlying cause and catalyst for war, depressions and other man-made crises.
The world is in an ocean of debt. Western nations especially owe far more than they could possibly pay back in any honest fashion.
You’ve heard that the United States is over $16 trillion in debt. But our true liabilities number in the hundreds of trillions. Accountants typically look at future unfunded liabilities over a period of time using something called “Net Present Value.”
Today, our future unfunded liabilities for the next ~40 years are over $200 trillion.
That doesn’t mean that in 40 years it will cost us $200 trillion! It means that if we want to be prepared for the next 40 years, it would cost us $200 trillion TODAY. Over the next 40 years, it will cost us much more than that – compounded at the rate of our debt’s interest. Today, that interest is low – less than 3% for most of it.
But even 3% of $200 trillion is more than we can afford. That’s $6 trillion! The federal government will only collect $2.5 trillion this year, and it will spend another trillion more than it brings in.
So even if we doubled taxes on everything and everyone, we’d still be about $2 trillion short. So we’d have to double taxes and cut spending in half to have any realistic hope of affording all of our debts and promises.
That only leaves dishonest options on the table. Oh, we’ll cut programs and expenditures eventually, but only after it’s far too late. And I’m sure we’ll raise taxes.
In the meantime, we still won’t be able to afford to fund even that $16 trillion of current debt.
There’s only one honest way to pay back debt, of course. And that’s to pay it back – in full and on time. It takes work, sacrifice, and diligence.
More importantly, it takes actual integrity. Because even if you have the ways and the means to pay back debt, if you’re dishonest, then it doesn’t matter.
This debt crisis will wipe out millions of poor people across the country and the planet. Moreover, more people will enter the ranks of the poor and impoverished.
I’m talking about hunger, homelessness, destitution, desperation and even death.
The worst part is, our leaders have no integrity. They’ll gladly promise voters heaven and earth knowing they can’t pay for it, and that eventually, they’ll destroy the currency.
If you think it’s not going to happen here, then I have to wonder what you think will protect us. Yesterday, we saw France get its sovereign debt downgraded from AAA status. No country can escape its debt.
And no country in history has borrowed its way out of debt.