Day of Reckoning

As all parents or adults, we have daily needs – grocery, shelter, transportation, repair bills, electricity to keep the lights on plus a host of other things.  And, occasionally you feel the desire to splurge – maybe a weekend getaway.  Maybe we spend more than we can afford, but there’s always the credit card!

Eventually the debt builds grows, the budget stretches, and you make “interest only” payments occasionally; but even minimum payments on the credit card, at 8-18% interest, the amount owed balloons!  But, it’s okay.  That hoped for wage increase in six months will ease the burden.  However, you know that you can’t continue this way and that eventually your debtors will require a “day of reckoning.”  You pray that your lenders will simply forget about you!

Teaching personal finance at the university, I’ve seen it all – families struggling financially, having autos repossessed, inability to afford a home, debt burdens, and bankruptcy.  They muse, “If only I had learned to live on a budget.”  In fact, all states in the USA (expect Vermont) require a balanced budget!  California, the sixth largest nation-state in the world, has a yearly balanced budget!  (Though having worked for the Governor’s Department of Finance, sometimes the revenues might be bit overestimated and expenses underestimated – but still basically balanced.)

Hopefully you’re aware that the United States has no requirement to balance its budget.  But, are you aware that the debt of the national government is your debt?  As the citizen owners of our government we are also going into debt.  And, are you aware of just how much debt the USA has?

USA debt has dramatically increased in the past 30 years and is currently $30.2 trillion ($30,200,000,000,000) and rising!  Your individual fair share is $90,853!!  And, we, our children, and grandchildren will be paying for that bill!  Now, suddenly it’s not just a big number about a distant government – it’s about YOU! 

And, this, $30.2 trillion does NOT reflect our unfunded liabilities that exceed $100 trillion, and that in less than ten years our interest on the debt will be $1 trillion a year (that’s interest only!)

At this moment, Medicare will be insolvent by 2026 and Social Security by 2030.

Again, this is a MASSIVE burden upon future generations, unless you think the USA government is somehow exempt from the basic rules of finance.

If you and I spent money so recklessly, you know that our “house of cards” would soon come tumbling down.  Perhaps those from whom we (the US government) have borrowed won’t want their money back?  Perhaps they’ll say, “Aw, shucks USA, that’s alright, you don’t have to pay me back?”  Maybe.  But then, again, some of us may still believe in the “tooth fairy.”

The immediate results of this debt is slower growth; compromised national security in an already very dangerous world; more of a gap between the haves and have not’s; increasing taxes from Washington; and the federal government will cut spending only to give more unfunded mandates to the states.  Ultimately, taxpayers and the states will bear the burden.

Just as a lender looks at your financial ability to pay for a loan, or debt to income ratio, we can look at the financial stability of the USA by comparing our debt to our “gross domestic product or GDP” (the total of goods and services created by the US economy annually).  It should normally be 30-40%.  Today it’s 129% and growing.  Is the day of reckoning upon us?

We’ll look at this debt ratio; our history of debt; who’s responsible; and solutions in upcoming columns.  Check out .

W. Bruce Lee is an educator and speaker ( with a career in government as an elected official and fiscal advisor, who has worked at the local, state, and federal levels.  He authors the “We the Government” column as a community service.  He is president of the Sacramento Taxpayers Association (SacTax) – promoting efficient, economical government; fair and equitable taxation which permits a strong, healthy economy; as well as sensible balance and rational control of government expenditures..  His private message telephone is 916-624-6476.

Copyright W. Bruce Lee, 2023

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