More Debt

  • Seems like I do this all too often. The U.S. Federal government debt just topped $21 trillion. I know. That's such a big number that it's hard to put it into perspective. So try this.

     

    Each U.S. citizen owes $64,260. Each taxpayer $173,548!

     

    Or how about looking at it this way. The average revenue per taxpayer is $27,817. So if the federal government spent nothing for any reason, it would take taxpayers nearly 6 1/2 years to pay off the debt.

     

    As if that wasn't enough, there's another $121 trillion that the federal government has promised to pay out in the future but hasn't gotten the money. So they will either need to break promises or do something drastic.

     

    Clearly something is wrong. I'm not going to get into the politics of this. There's plenty of blame to go around for both parties. But I will say that if you or I ran our family finances this way we'd either be bankrupt or facing charges for defrauding our lenders. And our politicians seem blissfully unaware of the problem. In fact, they're patting themselves on the back. Just this morning I received an email from Sen. Bill Nelson bragging about the new spending bill!

     

    What can we do about it? We can elect leaders who take the deficit seriously. But so far they seem to forget their debt promises once they're in office. Seems like they always manage to find a reason to postpone a solution.

     

    One thing we can do is to prepare on a personal level. That means having a savings strategy that accounts for inflation. Here at TDS we encourage you to save. But having all your savings in dollars can be bad if prices increase by 15% each year (like they did in the late 1970s).

     

    And that (or something worse) could easily happen again. One way the government could deal with the debt is to cause inflation. That makes the debt easier to repay. It's a little technical, but the amount of dollars in circulation has grown by over 500% since 2000. That's a precursor to inflation. As the economy heats up there will be pressure to increase prices.

     

    Another thing that you can do is to pay off any debts that you may have. We've recently published an ebook "How to Conquer Debt" that can help. (yes, we do make a little on the book, but at $6.99 it's an excellent value) There are also other resources available to you. Many good articles on our site. Whatever it takes, get yourself out of debt now!

     

    In case you're wondering about the stats, visit the U.S. Debt Clock site.

     

    Keep on Stretching those Dollars!
    Gary


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