Our nation is on the verge of writing bad checks

“Debt is the fatal disease of republics, the first thing and the mightiest to undermine governments and corrupt the people.” – Wendell Phillips

Years ago I lived in a small town. One day an opportunity came up if I could get $800 quickly to an Albuquerque music store. The banker listened carefully and then wrote out an order to the bank teller to give me the cash.

“Come in tomorrow and we will sign the papers,” he said.

That was a different era.

I still have that special 12-string guitar. Why did I get the loan? Because the banker knew I would pay it back. I would not have gotten anything if I was known to write bad checks.

This brings me to wonder why China and other nations still lend us money.

In the last several decades our country has consistently increased the national debt without any talk about retiring that debt. Our country is spending more and more of its resources just servicing the interest, not the principle, which grows bigger every year. Worse, in the last year our national debt has been significantly increased. Why should we care?

We should because there is the question of what will ultimately happen when we are forced by the magnitude of our debt to cheat our lenders. Will any country lend us a penny when they realize we will not pay them back? Doubtful.

The way Congress has structured the national debt is a Ponzi scheme in which our country is borrowing money every year to service the interest debt on previous loans. It is not a matter of “if” we will finally be unable to service our interest debt, it is a matter of “when.”

Only one ending to this

For decades the national debt has been bantered about, but neither party has shown the slightest interest in starting to pay the enormous sum back. Congress cannot stop spending more than it has. In real life and in Congress this will precipitate a long fall and harsh realities.

Some people say we cannot even start getting out of debt because of the magnitude of the debt. The amount of money needed would be the total output of our country for perhaps 10 years. So because paying it back will be so difficult, our country ignores the financial realities and just keeps on spending.

My friends, that is writing more checks not because you have money but because you have checks. There is only one ending to this, and it is not pretty.

Congress has accelerated its spending to the point that the dollar has little backing in the world. As a debtor nation spending a great deal of its resources servicing debt and then borrowing even more resources from other countries, we know how this will end one day since it can have no other ending. It appears we hope we pass on before the effect of our profligate spending comes home to roost — which it will.

Our kids and grandkids will have significantly fewer resources, and most of their lives will be spent dealing with the financial structural flaws of debt we foisted upon them. I wonder if they will even realize that we knew we were doing this to them but did so anyway?

We citizens are to blame

More than anything, our nation’s actions with the printing of money without backing will be what future generation fault today’s government for doing. There is a saying that if you laugh when you borrow, you will cry when you pay back. There is no doubt that the monetary finagling of non-backed “stimulus” money that our government pumped into our system must be removed some day. Money must have backing, or it will have to be removed through inflation.

Our nation has pumped unbacked money into the country previously and then suffered the consequences. The resultant inflation, which then removes the extra money from the economy, was a hard pill to swallow back in the 1970s, but it is nothing compared to what we will have to endure for this latest round of printed money.

Ultimately, we citizens are to blame since we voted in the people who are damaging our country. We have the ability to speak every day but instead spend our time rooting for Dallas and watching incredible dribble on the television. We have sat unmoving for decades as this crisis loomed. We have been warned many times about this. Only we can change the stripes of politicians.

The question we need to ask every politician before we spend any more money is: “What is your plan to repay the national debt? How soon will that be done?”

When politicians avoid the question and talk about “Bringing more goodies home to the fine people of New Mexico,” we must remind them that these are bad checks since no money backs them. Like the grasshopper who never believed that it was time to save for winter, our nation is talking about spending significantly more money on health-care reform and cap-and-trade legislation.

Ask politicians to retire the debt, vote accordingly

The “fun” discussions in Washington are spending more money. Paying our debts is never addressed. As Ogden Nash wrote, “Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.”

Please ask each national politician for a plan to retire the debt, not just come close one year or another to balancing that year’s books. See what they have to say. Vote accordingly.

Swickard is a weekly columnist for this site. You can reach him at michael@swickard.com.

Swickard bio │ Archives │ Feed