Tuesday, February 12, 2008

Our National Debt

The other day, I started reading America The Broke. Even though it's four years old, it's just as relevant as ever... perhaps even more so. Me and my husband are seriously considering taking $1000 of our tax returns this year and investing in gold. It's not a new idea from this book... I asked my grandma earlier this year if she'd consider moving my inheritance from Microsoft to gold because I'm a little bit wary of what might happen to the stock market... but this book paints quite a scary picture. Especially chapter 3. If you can't afford to buy the book and your library doesn't have a copy, go down to Barnes and Noble and read just that. It's something that could happen.

I remember as a kid I didn't care very much for Ronald Reagan. I now know more about him and I respect him as a Christian, but he did a very bad thing with our national debt and deficit. Even as a kid I knew it. I was quite happy in the Clinton years when we started to have a surplus (don't get me wrong though, there were plenty of things he did wrong)... and I'm pretty nervous now as Homeland Security and the Iraq war continue to rack up the debt today.

I know more than I want to about being in debt. All we have right now is a car loan, mortgage, and a student loan... that and the medical bills from when my kids had to go to the ER last summer when we were waiting to get approved for health insurance, but there was a point in my life when I had more debt.

Back then, I was making a lot of money. The debt was manageable, but we were still trying to pay it down. We could have saved a lot more and spent a lot less, and sometimes I want to kick myself for not being more financially frugal back then. Because when I got out of the military and my husband became the breadwinner, we took a 66% pay cut. And the debt was swallowing us alive. I couldn't imagine if today we had credit card bills to pay right now, with no job and living off temporary assignments and unemployment (if it ever comes through).

After learning of Dave Ramsey, I grew to hate debt. I realized how much of our income every month was being wasted in interest. I imagined how much cash we could have freed up if only we didn't have a mountain of debt in front of us. We have since tried to keep an emergency fund... which is a good thing because almost every time we got one last year, dh would lose his job again.

This book talks a lot about our national debt. While it's not the same as personal debt, we still have to pay interest on it. A lot of interest. This book says that on average, every person in America pays $1000 a year to pay interest alone. I don't know about you, but I would rather have that money go towards something useful like roads, or even the schools... or you could always put that into the taxpayer's pockets.

The problem is, our country thinks that it can buy whatever it wants, pay for whatever it wants, and we'll be okay. It doesn't work that way. In my personal budget, I have to make choices as to whether I buy clothes, take the kids to Jamba Juice, or buy something else. I can't buy everything that I want. And neither can the government. Our politicians think that they can, but we pay for it... and will continue to pay for it until it gets fixed.

We want to pay for an expensive war, give senior citizens social security, give medical help in the forms of Medicare and Medicaid (which I currently receive), pay for the roads, pay for education, pay for welfare, prisons, farm subsidies, and on and on. Many of these are noble things. Who doesn't want to help the poor? Who doesn't want to help the elderly? But the problem is, we can't afford everything that we want to fund.

This book is a quick read and I'm just starting the last couple of chapters where it gives suggestions on what we can do to improve the situation, but right now, this book is scary. It's no wonder that foreigners are buying up our assets, when we have this massive debt. It's no wonder that so many other countries of the world hold us in contempt. We're like some lazy cousin who is mooching off everybody else, promising to pay them back later, while they are working hard and loaning money to us.

We used to be a nation that loaned to other nations. Even the Bible says that you should be one who lends to others, and not one who borrows. We used to be more self-reliant as a people. Now we're a people that builds houses on barrier islands known for hurricanes, and expect the government to bail us out when it gets destroyed. Now lenders get the government to bail them out, after they gave out bad loans that they probably shouldn't have been giving out in the first place.

Perhaps one day something will happen to make us a nation of people that rely on ourselves and try to foresee circumstances in which we might need to be prepared. Until then, wanna buy some gold? Just in case we end up with runaway inflation... you never know. Wouldn't be a bad idea to stock up that pantry with food, just in case the prices start skyrocketing as well.

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