Tahlequah Daily Press

March 17, 2014

U.S. debt threatens dollar as world currency


TAHLEQUAH — Most of us are not number crunchers. Believe me, I am not a numbers cruncher. I tend to think of myself more as a wordsmith. However, after reviewing the nation’s debt clock, I’m going to attempt to blend my knowledge of understanding numbers so all of you will have an understanding of what’s going on with our nation’s debt crisis.

Hey, wait a minute, I thought the debt crisis was behind us!

Not even close. In fact, since 2008, the nation’s debt has doubled. That’s right, it’s doubled.

As of Tuesday, March 11, the United States’ national debt was a staggering $17.478 trillion. That’s a whopping $55,018 per citizen, or think of it as $151,377 owed by every taxpayer in America.

Again, I need to remind you I’m not a numbers guy, but I do know how to read. And reading the national debt clock (www.usdebtclock.org) is quite easy. For example, federal spending is $3,508,005,500,410 and increasing every second. By the time I finished writing the previous sentence, it had risen to over 3,508,005,800,000.

Don’t try to think of the nation’s debt so much as your own finances. If your income was $2.870 trillion but you chose to spend $3.508 trillion, you’d be in the hole by about $636 billion. Soon, credit card companies would be limiting the amount you could add to your MasterCard. Creditors might even begin to eye your house in the event you couldn’t make your monthly mortgage payment.

Now consider that the United States of America is the richest nation in the world. Our nation’s gross domestic product is a whopping $16.152 trillion. Did you catch that? Our debt of $17.478 trillion is greater than our gross domestic product. So what? Well, Webster defines gross domestic product as the “total value of goods (cars, trucks, ironing boards, etc.) and services (haircuts, dentists, lawyers, etc.) produced within a country’s borders in a specific time period.” In this case, that time period is one year. Now, most politicians (whether Democrat or Republican) will try to distract anyone pointing to this overspending habit our country is in and say, “Well, our revenue to GDP is only 34.7 percent. Nothing to worry about.”

I beg to differ. Anyone, including a government the size of the United States, spending more than they’re taking in during a protracted period of time (consider the past 40 years) is going to have to pay up – eventually.

Some economists argue that time may be upon us as soon as July 1, 2014. Economists argue that’s when the world will no longer accept the U.S. dollar as its common currency. Why? Well, the Federal Reserve has devalued the worth of the dollar to a point where it has little real value when compared to the indebtedness held against its worth.

China, for example – a holder of much of this nation’s debt – is getting a bit stressed over the quantitative easing introduced by the former Federal Reserve Chairman Ben Bernanke. Every quarter, Bernanke turned on the nation’s printing presses and cranked out $85 billion to sustain the low interest (near zero) that the government was paying on its debt. Economists are suggesting the interest rate will edge up to 4 percent in coming months, which will consume all of the tax revenue collected by the Internal Revenue Service to pay just the interest on our debt. That is when the proverbial bottom will fall out from under the bloated U.S. debt and this shaky economy.

So much for the good news. As a democratic republic, we the people have a choice in all of this. Really? Yes, we have a choice whether we change course in the November mid-term election by whom we elect. Now, before we all start pointing fingers at politicians, let’s remember most of our House and Senate members are incumbents. They were elected by us. They promised to fix Washington. They have not. We the people can either throw our collective hands up in the air in defeat, or we can support candidates who see the problem (overspending and over-promising).

Changing politicians in Washington or Oklahoma City is not the answer unless we the people are willing to hold their feet to the fire once we give them the power to institute change that is needed to keep us from going over the cliff into history’s black hole.