All information is from USDebtclock.org.
I often write about inflation and how it will likely be what ultimately brings down our entire economy. Many smart people when asked about how a disaster happens say “gradually and then all at once.”
If we go back to 1980- which is as far back as the debt clock goes, we can see the effects of conjuring up cash and how it has weakened our economy to the point where we are today.
While, in 1980, we were not exactly fiscally responsible, the real damage was just getting started. The problem is that when you start “money printing” the moment you stop it creates an implosion of prices because there is no longer an artificial backstop that keeps prices rising. This is why debt growth has been exponential. We are seeing the need for “printing” to even pay the interest on what we owe let alone any talk of retiring any existing debt.
Keep in mind that ALL TAXES and INTEREST that have to be paid take away from economic activity. Every dollar spent on gas taxes, local taxes, state taxes, federal taxes, excise taxes, school taxes, sales taxes, etc. take away purchasing power that could be used to prop up businesses and our economy overall. The higher the debt the less economic activity.
Keeping this in mind- when I show you these numbers you can more easily understand why those “in charge” need to keep “printing” and inflating or crash.
This is a breakdown of how bad this has become.
YEAR 1980 2000 2012 2026
State Revenue 229 billion 973.3 billion 1.6 TRILLION 2.9 TRILLION
State Debt 117 billion 644 billion 1.135 TRILLION 1.075 TRILLION
Local Revenue 196 billion 644 billion 1.09 TRILLION 2.25 TRILLION
Local Debt 203 billion 916.2 billion 1.782 TRILLION 2.2 TRILLION
US Gov. Revenue 492 billion 1.926 TRILLION 2.34 TRILLION 5.4 TRILLION
US Gov. Debt 874 billion 5.72 TRILLION 15 TRILLION 39 TRILLION*
Food Stamp Rec. 18 million 17.4 million 46.8 million 39.5 million
Living in Poverty 18 million 32 million 46 million 36.8 million
New Home Price 30,000 163,000 N/A 412,866.00
New Car Price N/A 22,204.00 N/A 49,763.00
Median Income N/A 31,727.00 N/A 51,877.00
To me, this is an illustration of why so many people (particularly the young) are having such a hard time getting by. The little purchasing power our dollar still has left is also being siphoned off to the tune of trillions that cannot be spent on productive enterprises and assets because it is spent on feeding the federal, state, and local governments who are spending us into oblivion. That REVENUE (Federal State and Local) of 10.55 TRILLION is taken directly from US. The government has NO Money. Nothing is free. It has to be taken from someone to pay another. Since raising direct taxes is highly toxic for a politician’s chance at re- election the go-to has been to “print” money and have an indirect tax that hardly nobody understands- Inflation and loss of purchasing power.
Yes folks- costs do not just go up. As a matter of fact, with technical innovation and efficiency prices should go DOWN. In 1800 a wagon full of goods cost $200.00. Because of the innovation of railroads and farming techniques, that same wagon cost $100.00 in 1900. With all of our innovation and extra efficiency we are still seeing our purchasing power disappear and my fear is that it is about to get MUCH worse.
While these numbers are scary enough, we also have to keep in mind the spending on wars, Social Security, Medicare, VA benefits, etc. are OFF THE BOOKS, which means the $39 TRILLION owed is a miniscule amount when considering the ACTUAL amount owed.
We have become an economy of fakes. We have fake (backed by nothing) money creating fake prices for virtually everything and the fake illusion that this can continue forever. It cannot.
The numbers are dire for most of our population. Those positioned correctly may just have an opportunity that they cannot imagine at this time.
While we are surrounded by propaganda 24/7 and every man for himself attitude in many cases, we should take some time this week to celebrate what is really important- our faith, our families, and the common good of all.
Personally, there are many people I am praying for- none more important than those being ravaged by war. Whatever your faith may be- celebrate it and let’s have PEACE.
Be Prepared!
Raymond James has no affiliation with and does not endorse the USDebtclock.org.
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