Why? Because our government – our leaders – show no signs of letting up on spending…hundreds of billions of dollars more each year than they take from us (which is at record highs, by the way).
While none of this spending and debt seems to bother too many people in Washington, D.C., it should bother plenty of Americans because the vast majority of them make up the 1 percenters they claim to hate, so no matter what happens to our economy, they will be okay.
As for the vast majority of Americans, a debt crisis and economic collapse would not simply be a short-term problem but a generational one. Consider just a few things from past economic collapses:
— The Great Recession of 2007-09 is still having a negative effect on the U.S. economy. Record numbers of Americans are completely out of the workforce, and while Obama administration policies and laws passed by Congress have hampered economic growth, the fact is that eight years after the collapse of the housing industry and near-collapse of the finance industry home prices are just now beginning to recover, while hiring and employment remain soft.
— The Great Depression of the late 1920s-early 1930s lasted more than a decade and was only stunted by World War II and the massive production needed to win the war.
Now, consider just how long a total debt-caused financial collapse would last. It would be a generation – or more – before the American economy recovered. What’s more, our collapse would lead to multiple economic collapses around the world because as the world’s No. 1 economy (still), our consumerism drives manufacturing and economic growth worldwide.
So, haven’t we heard all of this before? Should we really worry about it?
Yes, and yes, according to U.S. Sen. David Perdue, R-Ga., a former Fortune 500 CEO who knows a thing or two about income, out go and debt after doing billions of dollars worth of business on six continents.
“We owe $19 trillion, we’re in a debt crisis,” Perdue says matter-of-factly in an interview with The Daily Signal. Then after some quick arithmetic, he notes that the national debt combined with future unfunded liabilities amounts to “about a million dollars per household.”
And while the debt is massive, Perdue says he is more concerned with the interest liability it carries. If rates rise, and Perdue says inevitably they must, he doesn’t think the government will be able to make even minimal interest payments.
The Daily Signal notes further:
For the past seven years, the Federal Reserve has targeted rates at an artificially low level, around 0.25 percent, in hopes of easing America’s climb out of the subprime downturn. But in December, and for the first time in almost a decade, the Fed raised interest rates a quarter of a point, to 0.5 percent.
In Perdue’s estimation, that uptick amounts to $50 billion annually.
If those rates go higher—and Federal Reserve Chairwoman Janet Yellen has indicated already that the Fed soon may increase them—he predicts the country could have another “lost decade” like the 1970s, when interest rates peaked near 20 percent.
Perdue is facing an uphill battle, however, because – as evidenced by successive budgets in the red for decades – few others in D.C. believe there is a problem.
Still, Perdue says he will continue sounding the alarm.
“This merry-go-round is going [to] stop,” the Georgia businessman warns, “and when it does, we will end up in a very bad place unless we find a way to control it.
In times of turmoil, one of the first things to go is personal freedom. If that weren’t bad enough, imagine the loss of freedom you will experience when you lose your ability to control your own financial destiny.