Why America’s Bankruptcy Is Inevitable

     Just to be clear so everyone doesn’t break out in a panic… This won’t be happening anytime soon. However, it is very real problem that has still yet to be addressed. Now, what could a 19-year-old college student know? Quite a bit actually. The funny thing is, it doesn’t take a rocket scientist to understand the situation and ultimately the numbers. I have been involved with this specific topic for a couple of years now, dedicating much of my time to research and to dissecting the problem that is our debt. Interestingly enough, there is much more at play than most people can even fathom. Many factors are connected to our current problem, our nearly $20 trillion-dollar debt burden (although I will explain later the real amount is actually much, much larger). Let’s dive into the factors. (I’ll try to break it down and make this as simple and short as possible).

     So, when did our money problems begin? Really, they began back in 1913, with the passing of the Federal Reserve Act. This act effectively established what we now know as the Federal Reserve System of the United States. What most people do not know is that this legislation was drafted back in 1909 by a small group of incredibly powerful bankers. This legislation was drafted in private in response to the panic of 1907, where several large banking institutions provoked a near collapse of the U.S. economy. With the help of congressional insiders, this legislation passed several years later and was signed by Woodrow Wilson. An absolutely fatal mistake. With the passing of the Federal Reserve Act, a direct violation of the constitution was made. As it clearly states in article 1 section 8 of the constitution: “The congress shall have the power to coin money, regulate the value thereof, ad of foreign coin, and fix the standard weights and measures; no state shall make anything but gold and silver coin a tender in payment of debts.” The power of creating financial and monetary policy now resides with the Federal Reserve. With the Federal Reserve controlling our monetary policy, our money supply, and ultimately our entire economic well-being, they effectively created a private cartel. The best part? Most people do not know the Federal Reserve is a PRIVATE entity, not a PUBLIC entity. They receive no general oversight from the government of the United States, thus they are not held accountable by the people they control.

     Wait, it gets better. So, how has the system faired in a little over a century? Terribly actually. In fact, the Federal Reserve has done nothing but destroy the value of the American Dollar, cause inflation levels to rise out of control, and destroy the livelihoods of tens of millions of Americans [1]. Let’s not forget that Ex-Chairman of the Federal Reserve Ben Bernanke admitted in 2002 that the Federal Reserve caused the Great Depression: “Regarding the Great Depression, …we did it. We’re very sorry. … We won’t do it again” [2]. The Federal Reserve today still holds too much power over our economy and in my personal opinion should be abolished entirely, returning the power to create monetary policy and to print money back to the U.S. Government.

     Here are some graphics that depict how abysmal the Federal Reserve has been throughout its history:

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     Our next factor is the ever-growing welfare state. Regardless of where you lie on the political spectrum, you cannot deny that the U.S. Government has gradually become more and more involved in people’s lives, which is a very bad thing for the most part. From food stamps, to single-payer healthcare, to Medicare and Medicaid, to social security, to countless other programs, millions of people depend on government aid. Now, I understand there are extreme circumstances, so a little support here and there isn’t a bad thing, until you get back on your feet. But the fact is, our governments burden is tremendous. Who is responsible? The taxpayer. I have never met anyone who likes to pay taxes. Many Americans don’t even pay federal income taxes, 45.3 percent to be exact [3]. This means that the government is drawing its funds from fewer individuals than ever before, undoubtedly putting a strain on those who do pay income taxes. If you have ever taken the time to look at http://www.usdebtclock.org/, you’ll understand how incredibly screwed our nation is. Nearly $20 trillion dollars on our U.S. National Debt clock. BUT, in reality, the total U.S. debt sits near $70 trillion dollars. That is all households, businesses, local, state, and national governments, and financial institutions combined. There is an even larger amount though! The U.S. has $105 trillion dollars in unfunded liabilities. $16 trillion dollars in social security liability and $28 trillion in Medicare liability are included in the mix. That is OUTRAEGOUS. These numbers are clearly, without a doubt, unsustainable. Social Security was a pyramid scheme to begin with, anyone with common sense knows a system like that can’t last forever. Plus, the government spent every single contribution it received since its creation. How incredibly stupid can our government be?

     Lastly, it all comes down to bureaucratic efficiency and responsibility for oneself. It goes without saying that the government is applauded for spending money, while businesses are applauded for saving money and minimizing costs. Why does our government not take this approach? While the government isn’t 100% like a business, it still has income (taxes) and expenses (functions), many expenses that could easily be minimized or gotten rid of forever. Ever heard of the $500-dollar toilet plungers? $100,000 bronze busts? All ridiculous. Our government doesn’t care how much they spend on basic resources, because it isn’t their money [4]! I also think it is stupid that as a government agency, in order to receive proper funding, you must spend what you are allocated for that year. Spend everything, regardless if you have a surplus or not. Why isn’t that surplus rolled over to next year’s budget? Simple things like this can make a difference. When approaching the individual perspective, Americans should really invest in their financial education, and learn proper spending and savings habits, to ensure they are able to live a long and comfortable life. It is possible for everyone.

     Is it inevitable that America’s debt brings it to bankruptcy status? Yes, I do believe so. Many factors contribute to this catastrophic realization. The Federal Reserve system and its severe inefficiencies, our ever-growing welfare state, bureaucratic downfalls, and lack of personal responsibility are huge concerns that must be addressed and solved if we are to have any sort of chance in the future. While there are so many other things to consider, take these few examples as the biggest indicators of the inevitable bankruptcy of the United States.   

Check it out: U.S Debt Clock

 

[1] Why The Federal Reserve Should Be Abolished

[2] Bernanke’s Quote

[3] Federal Income Tax Facts

[4] Government Waste 2016