We need economic and financial sustainability.
Sustainability is a concept much in the news these days. Sustainable fishing, energy and wood products, to name a few. We were told, without complete consensus among scientists, that we have 12 years, now a bit less than that, to live on earth without experiencing a complete climate disaster–announced to be an existential threat–a threat to our very existence. Unless, we are told, we immediately find radically different and sustainable ways to live.
What about economic and financial stability? All of the Green New Deal remedies start in the trillions of dollars. Add in the cost of social new deals like Medicare for All, All being defined as everyone currently residing in the US along with free college and many more trillions in spending are proposed. And that’s with a current federal budget of less than $5 trillion. How can that be financially sustainable? How is that not a clear and convincing threat to life as we know it?
That is the subject of today’s 10-minute blog/podcast
I believe that America is a unique and exceptional place, and that you–you and I–have an equally unique and exceptional role to play in it. Yes, you have heard that from me before, and you will hear it again. That’s what drives this podcast.
Your role, our role, includes knowing the debt and deficit numbers, how they are likely to grow, and what they mean for us, for America. And for our children and grandchildren.
As of today, the 330M people in the US owe $22 trillion, money we have borrowed to keep going. That’s $67K owed by every man, woman or child in our country. If you add in what the federal government has promised in things like government worker pensions, Medicare and Social security, we are over $90 trillion in debt.
Pause for definitions: The deficit is the difference between what the feds receive in taxes, and what they spend. The deficit is covered by borrowing. Just like a credit card; if you spend more than you make, you need to borrow to make things work. The debt is the total amount the feds, that’s the taxpayers, owe. Again like a credit card, the debt is the total amount owed, while the deficit is the amount you just borrowed. The total debt is accumulated deficits. Our national debt is $22 trillion, with an average annual deficit of $1 trillion. At the risk of making your eyes roll back in your head, let’s bring up another comparison between the feds and a person or family. Fair? The annual federal budget is about $4.7 trillion. An annual deficit of $1 trillion, means that our government is borrowing over 20% of its budget each and every year. If a household spent the US annual average, $60K a year, it would have to borrow $12K, 20%, each and every year to match the feds in borrowing compared to budget. How long could a household sustain, there’s that word again, that percentage of borrowing before it collapsed? After 10 years, the household would owe $120K, and that’s not counting interest, which could easily double that amount. With no end in sight. Here’s a better question; how long can we, the US, sustain that kind of borrowing?
We cannot and should not tax our way out of this mess. We do not have a revenue problem; we have a spending problem. Said differently our golden goose is healthy and producing ever more golden eggs. If we continue to threaten the national golden goose by increasing taxes and regulations, we will kill the American goose.
For those of you who were actually paying attention in school, and not reading Aesop’s fables, Aesop wrote of a farmer who had a magical goose; one that would lay golden eggs every day. The farmer lived quite well selling the gold, but he got impatient; in his ignorance of how things worked, he cut the goose open to get all the eggs at once. Isn’t our society doing the same thing; killing the goose that lays the golden eggs?
Unlike state or local governments, and alas, unlike you and me, the federal government can simply print money. So, Will, why does that not solve the problem? Need money, well, just make more. Simple answer. Expanding the money supply without also expanding the economic engine simply means that with each new printed dollar, the value of each dollar in circulation goes down. How about an example? In this oversimlistic case, there are 10 loaves of bread in total, the only things available for sale, and $20 in the economy. Bread would sell for $2 a loaf. Now print $20 more for a total of $40 in the economy, but don’t bake any more bread. Bread would now sell for $4 a loaf. Overly simplistic? Yes. Clear and accurate? Also yes.
Today’s Key Point: As we look at new ways to spend the taxpayer’s money, our money, we must look at the sustainability of our economy in addition to the needs of our society, including the sustainability of food, water and natural resources. Economic devastation can be every bit as horrible as what might come as a result of climate change. And it is far more accurately predictable. Let’s not win the battles in education, healthcare, climate change and everywhere else, and lose the battle to have a functioning economy.
Segueing from the specifics of today’s topic to overall principles, the core, driving principles at Revolution 2.0, are:
And do it all in love; without love, these are empty gestures, destined to go nowhere and mean nothing.
If we apply those two core principles, personal responsibility and brother’s keepers, simultaneously, never only one or the other, we will always be on the right path. Depending upon what we face, one principle or the other may appropriately be given more emphasis, but they are always acted upon together.
The Founders, Revolution 1.0, were declared traitors by the British Crown, and their lives were forfeit if caught. We risk very little by stepping up and participating in Revolution 2.0™. In fact, we risk our futures if we don’t. I am inviting you, recruiting you, to join Revolution 2.0™ today. Join with me in using what we know how to do–what we know we must do–to everyone’s advantage. Let’s practice thinking well of others as we seek common goals, research the facts that apply to those goals, and use non agenda-based reasoning to achieve those goals together. Practice personal responsibility and be your brother’s keeper.
Let’s continue to build on the revolutionary vision that we inherited. Read the blog, listen to the podcast, subscribe, recruit, act. Here’s what I mean by “acting.”
Revolution 1.0 in 1776 was built by people talking to other people, agreeing and disagreeing, but always finding ways to stay united and go forward. Revolution 2.0 will be built the same way.
Join me. Join the others. Think about what we are talking about and share these thoughts and principles with others. Subscribe, encourage others to subscribe. Act. Let’s grow this together.
And visit the store. Fun stuff, including hats, mugs and t-shirts. Recommend other items that you’d like to see.
Links and References
Killing the Golden Goose (EP. 42)
As we get ready to wrap up, please do respond in the blog with comments or questions about this podcast or anything that comes to mind, or connect with me on Twitter, Facebook, and LinkedIn. And you can subscribe to the podcast on your favorite device through Apple Podcasts, Google, or Stitcher.
Now it is time for our usual parting thought. It is not enough to be informed. It is not enough to be a well informed voter. We need to act. And if we, you and I, don’t do something, then the others who are doing something, will continue to run the show.
Know your stuff, then act on it. Knowing your stuff without acting is empty; acting without knowing is dangerous.
Will Luden, writing to you from my home office at 7,200’ in Colorado Springs.