Your kids are in danger!!!

Your kids are in danger!!!  This is the second worst thing happening to them right now!!!  There is something swooping across the nation and it is crippling your children for the rest of their lives!  I cannot wait any longer and must warn you of the coming danger!

Now that I have your attention, I would like to talk to you about government spending, the debt, and why you should be listening.  You are probably thinking that I am such a liar and you are about to shut this off.  I will admit, this trick is a little dirty (I solemnly promise not to use it again), but would you read this if it said "government spending"?  And, I didn't lie to you.  Your kids are in danger.  I will explain how all of this ties back together, but first, there are a few basics that I need you to understand about why the debt is such a problem looming overhead:

1. The national debt is right now just over $14 trillion (going up by about 3.8 billion per day).  There are 300 million (approx) people living here in this country.  So, that means you owe $45,000.  Total due: now.  We only take cash.  Oh, and it gets even better.  If you are married, then your spouse also owes that amount.  You got kids?  Each one of them were born $45,000 in debt.  What a way to start life, huh?  And that number is growing.  I am just a regular guy.  There are four people in my household.  Total owed by my household for the government's debt: $180,000.  That is more than I owe on my house!

2. The government no longer has the option to borrow money from it's citizens.  Let me explain.  In WWII, the government "issued war bonds".  What it really did was take out a bunch of mini-loans from regular people like you and me.  So, why can't the government do that again?  Because much of the generation that survived the Great Depression is gone or retired (savers because they survived the worst shortage our country has seen, so they put money away for that situation), and has been replaced by a generation (or two) that doesn't like saving money.  In short, the citizens have little to no money saved up. If you don't have any money saved that isn't going to bills, then you can't buy war bonds (or anything for that matter).

3.  This is where it gets tricky for most people, but let me walk you through this.  I promise it will be fairly easy to understand (plus there's a summary at the end if you want to skip the numbers). and you will come out on the other side much better for it.  Here we go.  The national debt is not even the half of it.  The government has money that it has promised out (mostly to it's own people), but those debts have not come up yet (so they "don't count" in the national debt).  For example, I tell you on Monday that I will give you $20 on Friday.  I don't actually add that to my debt tally because it is not Friday yet.  Dumb political way of doing accounting, but it is what it is.  So, then, how bad is it?  Here's the breakdown (as of right now) if the country were to sell all of it's assets and pay as much as it could in liabilities:

a. Assets - $4 trillion in Small businesses, $13 trillion in corporations, and $59 trillion in infrastructure.  Total: $77 trillion

b. Liabilities - $15 trillion for Social Security, $20 trillion in prescription drug benefits, and $78 trillion for Medicare.  Total: $113 trillion

We have over $36 trillion that we couldn't pay if we had to right now.  Remember that $45,000?  Well that just almost tripled.  Try more like $120,000 per person in your household.  Per person.  Per Person!!!  Have I got your attention yet?

What does this mean to you?  How is this going to affect us in the end?  See here to get a short, simple explanation.  Once you have read that, then continue.  So, what do we do in face of these seemingly insurmountable odds?  How can we possibly overcome such debt?  And when are you going to tell me how this endangers my kids?  Let's look at some possible ways to help out with this debt, and then I will tell you about the why this is so vital to your kids.  Ways to help:

1. This has been covered by me previously, but it applies here.  We need to stop asking government to do the things for us that we can do for ourselves.  The government spends trillions on trying to take care of our retirement (planning), disability (insurance), and soon, healthcare (which I will talk about in a later post - subscribe to my feed for more).   We need to start planning on taking care of those things on our own.

2. Don't plan on receiving social security. If you are near or at retirement age, then ignore this. If you are not, then let's tell the government that we don't need social security, and then let's take care of our own retirement. That's $15 trillion less that our country would owe. This is something that we could take care of ourselves - more in a later post (just follow me here or twitter to find out when it comes).

3. Reform Medicare to something cheaper and that makes more sense (notice I don't say get rid of it - more to follow in a future article - stay tuned). As of 2006, 96 million (which is a lot in my opinion, that could be part of the problem - 1/3 of our population?!?!) people are on Medicare and we are spend $78 trillion on it? How much sense does that make? That is $812,500 per person on Medicare. If you or someone you know has tried to deal with that system, it is awful. Why does it cost so much, then? I don't know. But it is definitely something that I don't see being discussed a lot and it should be.

4. Get back to exporting. When we export things, business get revenue from outside the US. They are taxed on that revenue, so the government makes money. The public sees job creation (someone has to make the things we export), and the government takes their piece of that, too. All of this money that is being spread around this country is coming from other countries. We need to stop working on making China rich.

And these are only a few of the ways we can do this. I think there should be lengthy discussion and debate on this topic. The public should be allowed to participate through social media sites. The politicians shouldn't be the only ones making decisions with our money. In fact, I think that all of our major issues should get public involvement (with a few national security issues aside, of course). We are, after all, "A government for the people, by the people". I don't feel like I had much say in the whole "let's go into serious debt" decision. And I know that our kids - who are being born with enough debt to crush marriages and compact cars - definitely didn't.

So, I bet you want to know how this endangers your children. Well, I covered it some in the national security post, but here it is. If we don't fix this problem - and soon - we will be facing some real issues trying to keep financially stronger countries from taking advantage. US policy makers would probably be tempted to sell off weapons (like they did in Russia) to keep people fed. We saw in 2008 how quickly our economy can turn. And one built on debt is doomed to collapse. So, what happens when it does? Does anyone want to find out? When will it happen if we don't fix the situation? I am not sure of the answers, but I do know one thing - if we keep going down this road, it will collapse. It could be while your kids are alive, or your grandkids, etc. Are we really going to leave them in an uncertain and potentially dangerous situation? Would you let your kid play in the street?