Friday, July 20, 2012

It Doesn't Take Common Sense to Know...It is Impossible to Think the United States Will Ever Payback it Debts

It Doesn't Take Common Sense to Know...It is Impossible to Think the United States Will Ever Payback it Debts.

A lot of people are very upset about the rapidly increasing U.S. national debt these days and are demanding that we devise a way to pay back the money we owe. What they don't realize is that there simply is not a solution under the current U.S. financial system. I am pretty sure it is mathematically impossible for the United States government to pay off the national debt. The truth is that the U.S. government now owes more dollars than there are in circulation. The current total is now $15,893,964,530,101. By the time I am done writing this post, the debt would have most likely increased $405,210,571. That's assuming it takes me one hour to write this. If the U.S. government went out today and took every single penny from every single American bank, business, and taxpayer, they still would not be able to pay off the national debt.

A common misconception is that all of the United States debt is in China. As interesting and fun as this talking point seems, it is simply not true. The U.S. holds about 50% of its own treasuries to help pay for entitlement programs such as Social Security and Medicare, that is basically like stealing from the bank in Monopoly when you are the banker. Now, dangerously 25% of our debt is owned by foreign governments, with Japan and China being the biggest owners which really is not a good thing. If they were to suddenly flood the market with U.S treasuries, it would be devastating for the United States because there is absolutely no way for us to make good on the money that the treasuries supposedly represent.

The U.S. federal government is probably betting on inflation, while other governments are betting against it. If the U.S. dollar continues to inflate then U.S. debt will most likely be washed away. A huge risk considering that the people who will pay for that gamble is the United States taxpayer and citizen. By taking on so much debt the government almost forces itself to cause inflation as best they can. They continue to borrow money, dump it into the economy in the form of stimulus, keeping interest rates low, and everything else within their power to do, just to keep inflation going, so they can just borrow more and more.

Now when it comes to the all of the stimulus packages, TARP, and auto industry bailout, it is no wonder that the United States is like a degenerate gambler. We keep begging for more, taking it from whoever we can, in the hopes that one of our bets will pay off. The problem is that the United States is just in a perpetual cycle of spending money we don't have and unfortunately, we are at a point where there is no form of recovery possible. If we want to continue existing as a country we are going to need a complete overhaul of our financial system.

Now at the risk of sounding too conservative, the simple honest way of curtailing our national debt is that serious and unfortunate cuts need to be made. Now I am not a proponent of cutting every social program and privatizing everything, but the immense amount of social programs that exist in this country are sucking the taxpayers dry.

Which brings me to another point. We can no longer persist in thinking that taxes are something that we need to fight. Don't get me wrong, I don't like taxes, and I want taxes to be as low as they possibly can but the simple fact is that we can't afford it. Tax cuts will not cure the problems we have. There won't be any "trickle" down effect. Maybe twenty five years ago tax cuts may have been effective, but less taxes will just hurt us more. The key might be cutting spending and keeping taxes where they are.

I am not an economist nor do I claim to be an expert on the economy and what the solutions are. As I have been trying to say for just about every post now is, common sense can solve just about any issue. Common sense will tell you that spending money that you don't have is not going to work for long. Common sense will tell you that cutting taxes and increasing spending will not work. Common sense will tell you that if you give rich people money they are not going to reinvest it.

Finally to address the title of this post, "It Doesn't Take Common Sense to Know...It is Impossible to Think the United States Will Ever Payback it Debts". The amount of money that the United States has borrowed is an enormous number. I know it is difficult to understand that amount of money, even I can't comprehend it. Maybe it's easier then I think to pay back almost 16 trillion dollars. Just to quickly wrap your head around concept of 1 trillion, if you spent 1million dollars a day for 2000 years you still would not spend 1 trillion dollars. The United States is nearly 16 trillion dollars in debt, where is that money coming from?!?! How did we spend that much in the first place? Also, according to http://www.usdebtclock.org/ the United States debt, puts every taxpayer in debt 139,432 dollars. Check out that website if you want to feel sick about government spending.

Simply put, unless you are an economist there is no way to wrap your head around the debt problem in this country. There is no real solution to the problem of the United States debt and my personal opinion is that we have reached a point of no return when it comes to it. What the future holds for the United States really is unknown but most likely it is not going to end well. I am not trying to sound dramatic but like a degenerate gambler, the United States is in a ditch with its legs broken not knowing how the hell to get out.

Written by: Salvatore Pezzino Jr.
Edited by: Julius Motal

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