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Wednesday, January 5, 2011

The Dangers of Our Growing National Debt.


If someone had said, two years ago, that there would be riots in the streets of London and Athens as a result of their respective Euro-Socialist governments, he would have been labeled as an extremist, a kook, a crank and/or a fear-mongerer by those on the left. And how about now?
The national debt of the United States has now surpassed 14 trillion dollars, and the fiscal debate is about to get very ugly. Liberals want to raise the debt ceiling in order to continue their out of control spending, and conservatives want to cut spending programs to reign in and pay down the debt.
Funny; that liberals assume they are more educated than their conservative counterparts, yet they just aren’t smart enough to see the impending disaster looming just over the horizon. We’ve seen this pattern before: how many times were the liberals warned that the housing market bubble, inflated by bad loans and interest rate gimmicks, was going to burst in a manner reminiscent of the Hindenburg, resulting in a similar catastrophe on our economy?
Get ready for the Hindenburg Part Two! Our growing, massive debt is already problematic, but the consequences of letting it grow larger will be cataclysmic. Just look at all the European Socialist countries whose government run programs have had very dire circumstances: Greece, Ireland, Portugal, and Great Britain. These countries are implementing “austerity” programs to contend with their economic woes, and who is suffering the consequences? The people, of course: the very people who were supposed to be the beneficiaries of their governments’ largess. In several cases these nations have paid off their huge debts by borrowing money from other countries, going deeper into debt. Thus their financial problems have only been placed on hold. Sooner or later, someone’s going to have to pay the piper!
These nations are puny compared to the United States, and don’t generate nearly the GDP we do. But knowing that, should we feel secure? You know the old adage: The bigger they are, the harder they fall. Consider the fact that our national debt dwarfs all others. Consider too that our states and municipalities are carrying their own massive debts and will be forced to look to the federal government, a government with no money, for bailouts. The only solution will be for the feds to print more money, causing massive inflation. The value of the dollar will shrink. And this is why our economy is so precariously moored.
China, our main creditor, not to mention our primary adversary, is already pushing the international community to drop the dollar as the monetary unit of international currency. http://www.nytimes.com/2009/03/24/world/asia/24china.html This is the lightning strike that will bring our economic Hindenburg crashing down in flames. Indeed, measures are already underway to accomplish this very thing! http://news.xinhuanet.com/english2010/business/2011-01/05/c_13677915.htm
In the U.S., we pay far less for gasoline than other nations because we don’t have to pay international exchange rates to purchase oil. Ever wonder why gas prices are double in Great Britain than they are here, or why gas is nearly $10.00 per gallon in other countries? In part the answer is exchange rates. If, as China hopes, the dollar will be replaced by the yuan, our per gallon price for gasoline will increase drastically – perhaps even double! This in turn will ripple throughout our entire economy. Everything will cost much more: bread, eggs, grains, meat – everything that is transported by petroleum-powered vehicles! Energy prices will also skyrocket as a result. Airline tickets?: How about double what we pay today?
In the end, our socialist-like programs, the ones our governments have foisted upon the back of the tax payer, are going to ruin, not just the poor for whom they were ostensibly implemented, but everyone.