At about 11:22 PM, EST on Tuesday, September 4, 2012, the US national debt clock registered trillion. In case this does not concern you, note that the share per taxpayer is 0,000. And it doesn’t end there; our nation also has unfunded liabilities of trillion for social security, trillion for the prescription drug program and trillion for Medicare for a total of 0 trillion.
The individual share of this awesome amount is over $1 million for each passenger on this 236 year-old ship-of-state called the United States of America.
Wherever there is debt, there are holders of debt (creditors). Thirty-five foreign countries plus other entities hold more than $5 trillion of our US Treasury Securities. The principal debt holders are China, Japan, Brazil, Taiwan, Switzerland, Russia and the UK. The national debt has increased $5.4 trillion since January 20, 2009 and interest on the debt was $454 billion in fiscal 2011. As of January 30, 2012, the current debt limit authorized by Congress is $16.394 trillion, meaning that a new debt ‘ceiling’ will be subject to political demagoguery and wrangling.
The uncertainty of tax increases and reduced government spending may create a ‘tax cliff’ after year-end with dire consequences. These two economic changes create turmoil and uncertainty when they collide in government, industry and throughout the private sector. In addition, there are new regulatory provisions that could be introduced after the first of 2013.
The Labor Department will probably introduce ‘The Fiduciary Rule’, increasing litigation risks for businesses that offer certain forms of investment guidance for employees. The EPA is expected to awaken the ‘Ozone Rule’ that was originally proposed in 2010. This rule would be priced in the $90 to $100 billion range for industry. There would be certain geographic locations that would be off-limits for some industries that could not meet the strict EPA-mandated air quality standards. Another regulation that may be offered by the Department of Transportation requires all vehicles to have rear-view cameras with a video display on the dashboard. Estimated cost of this auto and truck upgrade is around $2.7 billion.
While the massive debt and added regulations are discouraging, the unemployment rate in July was 8.3%, continuing the joblessness of 8%+ for more than three years. Subdividing segments of joblessness, the rate for Hispanics was 10.3%, adult men 7.7%, adult women 7.5%, teenagers 23.8%, whites 7.4%, blacks 14.1% and Asians 6.2%.
The USDA reported that in June a record 46.7 million recipients received Supplemental Nutrition Assistance Program (SNAP) benefits costing more than $6 billion. That’s one in about seven people or 15% of our population. The current US population is 314 million with a civilian labor force of 155 million. There are 12,800,000 unemployed, 61,639,000 receiving social security benefits, and just two employed workers for every unemployed and retired citizen. This ratio is unsustainable but politicians in their quest for votes continue down the myopic path to socialist oblivion.
Before we reach the untenable position of Greece and other crumbling economies, there must be a heightened focus on the future of this country. Although there has not been a congressionally approved budget in more than three years, a balanced budget must be created and implemented rigorously.
The most important lesson is that we must all take personal responsibility. The value of liberty and freedom are too great to place total dependence on the patriarchal tendencies of government, unions and employers to assure our retirements. Precious financial resources are being hemorrhaged at the rate of $42,860 per second. Time is of the essence.
As Winston Churchill once said, “I never worry about action, but only about inaction.”
