There is nothing inherently wrong with borrowing money. Taking out a loan to fund a business, buy a house, pay for education are all worthwhile endeavors for individuals and a nation alike. This said, there comes a point where imprudent borrowing and lending run the risk of fiscal calamity. That segment of our economic landscape is a distant memory in our nation’s rear view mirror.
My 8th grade son is mesmerized by the Debt Clock in the left hand sidebar here at Sense on Cents adding ~$5,000/second to our national debt. He asks me how our debt could have gotten so high and so out of control. For his benefit and that of others, I welcome providing another view of our nation’s past and projected fiscal deficit.
Thanks to the folks at Instapundit.
Deficits projected by the Congressional Budget Office of ~$900 billion over the next 6 years will put our nation into a death spiral. Grand plans put forth by politicians and public policy makers will not be worth the cheap paper on which they are written. Why? The value of our currency will continue to erode and our credit rating will go right along with it. What else will assuredly transpire? Stagflation.
While those perils are right around the corner, I ask now what do we have to show for our massive deficit? What businesses in our nation have been started and are thriving due to the money borrowed by Uncle Sam that could not have been borrowed by private enterprise?
Did somebody say our financial services industry? No doubt plenty of OUR money has been plowed into and through our financial system with questionable payoffs in return.
Did somebody say autos? Did somebody respond that those funds were more a payoff to unions at the expense of creditors and others? Have we made any sort of meaningful progress in our public education? Infrastructure?
Seriously, I am not writing here to make a political point. I am inquiring for my son and your children as to what we really have to show for our nation’s massive fiscal deficit. Remember, 40 cents of every dollar we borrow is directed to funding our nation’s debt. Borrowing money and spending it like a drunken sailor is no way to run a nation.