Skip to comments.7 Reasons Americans Are So Complacent About Our Country's Impending Bankruptcy
Posted on 06/26/2012 3:56:44 AM PDT by Kaslin
America is on track to go bankrupt. Just like Greece. The signs are all around us. We've lost our AAA credit rating. Trillion dollar deficits are the new normal. The Fed is buying 61% of our own debt. Barack Obama's 10 year budget will leave Americans with more debt than has been accumulated by all previous Presidents in American history combined. Nobody on the Left or Right seems to believe we'll ever pay off all of the money we owe. Life as we know it is very close to ending and yet Americans seem to be infected with a tragic stoicism. Like turkeys being led to the slaughter, most Americans seem content to put their necks down on the butcher's block and wait for the ax to fall. There are reasons for this puzzling inactivity in the face of an avertable catastrophe.
1) They're being misled by people with bad motives: What do you think would happen to Paul Krugman if he were to tell everyone that he is still a liberal, but the Tea Party and Paul Ryan are right about the deficit and Barack Obama and the Democratic Party are wrong? His column at the New York Times would be gone within six months. Do you think Nancy Pelosi and Harry Reid would continue leading their caucuses after 2012 if they insist on serious deficit reduction? Not a chance. What about a Democrat running in a liberal district who talks like Jim DeMint on deficits in a primary up against another Democrat who wants more spending? Who do you think would win? The big spender, right? Unfortunately, there are a lot of people in this country whose personal welfare depends on encouraging as much government spending as possible and even if the country goes bust in the process, they're hoping to have enough money in the bank to be able to move somewhere else by then anyway.
2) They think it's far off in the future: Most people think bankruptcy is a problem we'll be leaving to our kids after most of the people reading this column are dead and gone. That's not so at all. If you were a betting man, 5-15 years would be the likely timeframe on a default with it practically guaranteed to happen within 25 years without major changes -- although that may be far too optimistic. America is already stretched to the breaking point and who knows what sort of unexpected event could push us over the edge in the next few years? Maybe the crack-up of the EU, a European bank collapse, an organized effort to keep other nations from buying our debt, another, even more devastating 9/11 style attack, a dramatic surge in oil prices caused by an Israeli/Iranian war, etc., etc. Just as the mortgage crisis caught us flat footed and caused much more damage than we expected, a new crisis that occurs while America's economy is still puttering along as it has been during the Obama years could lead to a much deeper economic spiral than we anticipate.
3) Crisis fatigue is rampant: This is the most important election ever! Tune in at 6:00 P.M. to find out which ordinary product you use will kill you! George Bush is Hitler! Republicans want you to die! Racism today is as bad as the sixties! If you oppose gay marriage, you want to drag homosexuals to death behind your truck! If you disagree with Obama, you're a racist! Your freedom is at stake! Global warming is going to kill us all! Modern Americans are deluged with phony crises and ginned-up outrages all day long. That's why it's not a surprise when a real crisis as serious as anything we've ever faced in our nation's history comes along, many people have trouble distinguishing it from the fake dangers they hear about on a daily basis.
4) It's too confusing to comprehend: Most Americans don't even remotely understand the scope of the problem. They think we can raise taxes on the rich, cut a few bucks off foreign aid, and everything will take care of itself. When you start talking about unfunded liabilities, GDP, and trillions in debt to people who don't know much about economics and don't follow politics very closely -- which probably describes more than half of the American electorate -- you might as well be explaining the ins-and-outs of heart surgery. In other words, they may get it in the most general sense, but they don't really understand it, and they probably aren't going to opt for it unless they become convinced they're going to die otherwise.
5) It's painful to stop and easy to continue: It doesn't matter how reasonable the spending reductions you're suggesting are, if you want to cut ANYTHING in D.C., it will set off squawks of protest from the vultures who are having meat snatched out of their greedy mouths. However, if you really want to make people angry, start hacking money out of the three biggest expenditures in the budget: defense spending, Social Security, and Medicare/Medicaid/CHIP. We MIGHT be able to get by without cutting defense significantly since it's a relatively stable expenditure, but unless significant changes are made to both Social Security and Medicare/Medicaid/CHIP, both of which are rapidly increasing in cost, this country is going bankrupt. That's reality. Of course, it's also reality that making changes to both of those programs is unpopular, easy to demagogue, and scares most politicians more than a special prosecutor talking to their favorite hooker.
6) We still seem to be a rich country: America is a like a guy who lives in a five million dollar mansion with a dozen servants, drives a Ferrari, and hands out hundred dollar tips to waitresses and bellhops. The only problem is the mansion and the Ferrari aren't paid for, he's borrowing the money for the servants and the tips, and he has no hope of ever paying off the debt he's accruing while he lives a lifestyle he can't afford. Superficially, he looks to be very rich, but when the bill comes due, life is going to change for him in a hurry.
America is that guy and the bill is going to come due.
7) They don't see how it will affect them: Most Americans don't have the slightest clue how a default would change their lives for the worse. They don't understand that it would lead to another Depression, their life savings could become worthless almost overnight, their taxes would skyrocket, their standard of living would drastically decrease, Medicare and Social Security checks could stop, and we could have widespread disorder. In Greece, some government workers haven't been paid in months, government road projects are being abandoned, healthy businesses can't get credit, and medicine is in short supply. Unless something changes, Americans won't have to imagine what that will be like because we'll be living it soon enough.
People have been conditioned to tune out because of all the crying wolf over the environment and other social issues.
I have only one question on the subject. How have the clowns in the federal government managed to kick the can this far down the road without total collapse? Never mind kicking it another generation, I really don’t understand what gets us through next month. I have been saying for decades that there is no hope for this country in the long run and the run has already lasted longer than I ever expected. It would appear that in truth we are in FAR worse shape than during the thirties but the smoke and mirrors keep people from realizing that.
I think we are generally demoralized and thus don’t feel motivated to fight.
If our leadership couldn't/wouldn't do anything when it mattered and would have made a difference, how can I be enthusiastic about their efforts now (such as they are) when it is almost certainly TOO LATE?
Besides, politicizing the blame is NOT resolving the problem...never was!
8. Virgina keeps putting up George Allen or some stupid Democrat. People are too lazy to change.
Long ago there was this thread talking about enemy invasion of the US. A typical poster: “Why should I give a sh*t if there’s not enemy soldiers beating down *my* door?”
No need to look any further.
The Marine Corps is at War. America is at the mall.
Americans correctly figure that the reserve currency status of the dollar will protect them for a while longer. One thing we have that other countries don’t is a worldwide infrastructure to prop up the dollar. For example, the IMF: we own it.
In short, we have met the enemy and he is us!
People have heard that “We are all going to die!” for so long, they have stopped caring.
3) Crisis fatigue is rampant
The clowns in dc have been able to kick the can down the road by borrowing against future tax receipts on paper.
This go round, the regime borrowed to the point that the debt is no longer managable. The interest payments alone would swamp a smaller country. The fed has been quitely buying up parts of our debt and bernanke has been printing money. Look at what groceries cost compared to two years ago.
It is actually simple economics, spending more than you take in will eventually cause your economy to collapse. Despite what “economists” say, the same rules apply to individuals and national economies.
A huge portion of Americans are dependant on income transfers and a huge portion of Americans are no longer paying into that system because they are out of work.
Combine that with the fact that we are backstopping an out of control Europe and you bet we are heading toward financial poopstorm.
Most Amerians don’t get it because they either don’t feel or see it yet, or they listen to the major media who confuses reality with lots of fluff intended to cover for the current rulers.
It’s like that dem thing of taking advantage of a crisis. The reality is, if they are able to take advantage, it must not be a real crisis.
In a real crisis, the “people” finally wake up and see the need for solution, instead of political advantage.
Your comment is far closer to the reason why everyone is complacent as compared to the article. Remeber when even the stallwart conservative Dick Cheney said "deficits do not matter"? I have felt the country would go bust for 25 years. We have been playing financial games (as you note in your comment) for 50+ years and have apparantly, somehow , gotten away with it. The naysayers (like me) have been crying foul for over 40 years and the party keeps on rolling and more programs are invented. Why not be complacent? The naysayers have been wrong day in and day out for decades. This time it is different? I know this is going to unravel, but we still have several trick we can play, including paying off our debts with our own money. another part of the problem is that the naysayers, like me, base their arguments on morality rather than knowing the true nature of the balance sheet. Most people are not into morality based arguments. What has been going on for the last 50+ years is morally wrong and we have expected to see punishment for it...The punishment never comes and we look like silly little preachers (rememeber..deficits do not matter?). But we know in our hearts that the day of reckoning will come, who knows maybe it will happen in our lifetime.
I think that Gov. Scott Walker showed the way out of this mess:
1. Cut the budget.
2. Take the money away from the leeches.
If I’m wrong, someone correct me.
This only applies to the wealthy in this country. Most middle class people I know are terrified of what's happening and know they can do nothing about it.
On the other hand, the wealthy are insulated from what's happened, what's happening and what's to come so THEY go along their merry way. This includes about 85% of politicians who think the U.S. is an endless pit of money there for their taking.
The Marine Corps is at War. America is at the mall.
It is infuriating.
Smoke and mirrors is almost right. Americans are deceived by television these days. As long as we take our cues from the idiots on the tube, there is no hope.
Very astute points. Thanks for the article.
OTOH maybe I’m dreaming. We may never wake up, but that would be too doom and gloom.
I agree with your demoralization comment. It feels as if the beast is too big to fight. Can an individual alone make any difference? The current insanity prevents logical argument and unless one has the skills to overcome the delusions, how can we make progress?
So I pray.
How do we fight it? Congress was swamped by people opposed to the TARP bankster bailout. It passed anyway. After that the huge porkulus passed. The Senate has not produced a budget in years. It doesn't seem to matter. What do we do?
I’ll be curious to watch for that answer, too.
Often I find that No. 4 is the case with a lot of the people I talk to about this issue. They simply can’t grasp it. They see things going on day after day in the same manner they always have, and think, gee, what’s all the fuss about? When I ask them about paying off tens of trillions of dollars in debt their eyes just glaze over. They can’t comprehend it. It’s like trying to understand the size of the universe. For the average voter, talking to them about trillions of dollars in debts is like talking about distances in parsecs. Yes, some, perhaps many, are truly frightened about the size of the debt, but those who don’t understand it or don’t care about it or simply want it to increase until collapse to fulfill an underlying agenda seem to control the system now, and likely will until it crashes.
Our economy is so complicated and confusing, people simply can’t fathom what is going on. Plus, they have to go to work, raise children and take care of their own problems.
Bah. I look at our military presence all over the world and I know we’re not broke.
“Barack Obama’s 10 year budget will leave Americans with more debt than has been accumulated by all previous Presidents in American history combined.”
We have been operating without a “budget” for the 3-1/2 years Obozo has been in the White Hut. 10 year plan? Where did that come from?
Long term? 2 years is long term now if you go to the bank and talk to them about where to put money. Strange times we live in.
Life is a risky enterprise. Central Government does not reduce the risk, but obscures what the real risk is.
“Too Big to Fail?” But it already has? We are simply papering over the problem.
When the Left looses in November, will they collapse the global economy? They will certainly try.
Globalist vultures of all shades are circling. Will the result of all these lies coming to light lead to another Global Conflict?
Is this all part of the plan to force a Global Currency and Government on the World? Yes.
Are men smart enough to engineer that? No
Forces of evil are.
The Gravity of these times is amazing.
This. It's always this.
In the 1930's Team Germany figured out fascism and the rest of the world paid a price for it's incompentence.
——It would appear that in truth we are in FAR worse shape than during the thirties but the smoke and mirrors keep people from realizing that.——
It’s hard to know.90% of our debt is Medicare and SS IOUs written to ourselves. If this debt is repudiated, it will cause societal convulsions, not all of which would be bad.
Families would have to move in together to support the elderly, both for long term care and to pay medical bills. With charities filling the gaps, we could survive this relatively easily, in comparison to the Depression.
The remainder of the debt would require real, annual budget cuts of 5% per year, until annual spending is brought under control.
This approach to debt resolution would allow the economy to flourish, perhaps even increasing tax revenue.
None of this can possibly happen until the alternative is worse: hyperinflation, etc., which would hammer the productive sector.
We have allowed China to replace us.
They keep us in place, but in every way they have replaced us.
That is a huge problem. Even WE buy our own stuff from China.
You’re not wrong - the solution is very simple - but the route out is fraught with difficulties. Just recall all the trouble that Scott Walker had in implementing those policies. Now imagine that over all 50 States, and for year after year after year (because this is not going to be fixed quickly). Think that’s possible? I don’t. For all the reasons that cleverer folk than me have elucidated on this thread.
I think the BIGGEST PART of the problem is that otherwise conservative people, many on this site, are more than happy to see this country go broke, as long as their precious Social Security and Medicare don’t get touched (even if all of the money they paid in was spent decades ago by the people they collectively elected).
Many, of not most, of these people have enough money to be able to live on less handouts from the government and/or live on money from their kids, but simply will not accept those options, as it means that their gold-plated Winnebego might have to be 32 feet long, rather than 40 feet long (or living in an apartment, rather than a 5-bedroom house).
Their priorities are as follows:
1) Never, ever, touch their ‘entitlements’, NEVER!!!
2) Cut spending somewhere else, anywhere else, foreign aid, food stamps, National Endowment for the Arts, etc.
3) Let the country go broke, if spending cannot be cut
These are the priorities of half of the older conservatives on THIS SITE. The priorities of the liberals are similar, except they also want to keep #2. Given that, entitlements simply will NEVER get reduced enough to matter.
So what are the options:
1) Turn into Greece (actually much worse) and watch Mexico zoom by us economically.
2) Raise taxes now on the middle and lower classes (i.e., people that cannot easily evade taxes) to pay for this garbage. If people DEMAND a $4T government, then they need to pay for it.
I prefer Option 2, since I have kids, but most conservatives seem to prefer Option 1.
If by leeches you also include the military and pensions, you’re right.
How many on this forum will be willing to slash the military budget to crawl out of this hole?
We need to slash *everything*.
And if we say to ourselves “We can’t cut the military! That’s a threat to national security!”, then we need to figure out which is better....voluntary reductions now on our terms, or involuntary reductions in the future on, possibly, an enemy’s terms.
Well, people are selfish. Always have been. Sad but true.
If you really care about the military you would be in favor of tariffs to stop the off shoring of our manufacturing base. We can recruit and train troops in a hurry, you just can’t build and man a steel mill over night.
It's easy to blame Pelosi, Reed, and Krugman on this one, but the sad fact is that Republicans haven't done much better when they have had the oppurtunity to make a real difference. Sure, the Pubs can talk tough about the deficit and debt when they only control the House and they know that any "tough-talk" budget legislation will never get past Reid and Obama, but the Pubs have done nothing meaningful when they have been in a position to make a real difference, like when we controlled the executive branch and both houses of Congress under Bush.
That's one reason why I'm stocking up on toilet paper. Get it while it's still affordable. (I'm only half joking).
I’ve never seen a real T-Bill. Do you think it would work as TP? Would it hurt my septic?
Forces of evil are.
"For our struggle is not against flesh and blood, but against the rulers, against the authorities, against the powers of this dark world and against the spiritual forces of evil in the heavenly realms." - Ephesians 6:12
Have you considered that maintaining a military presence all over the world might be a significant reason why you are going broke?
> 4) It’s too confusing to comprehend:
Perhaps if the Tea Party stopped saying that we are $15 Trillion dollars in debt and started saying that our Government has spent $65,000 for each and every man, woman, and child in the US, it might mean something. Then ask, how each man, woman, and child intends to pay that back when the bill comes due. Trillion is too large for most people to understand.
I heard what sounded like a voice from among the four living creatures,
saying, "A quart of wheat for a day's pay or three quarts of barley for a day's pay.
But do not damage the olive oil and the wine."
Correct. It has always been so. There are times when it is more evident.
The US government defaulted 3 times in the 20th century by abandoning “promises”.
The next default would likely be trying to inflate our way out of debt.
* 1934, the government banned ownership of gold and eliminated the right to exchange gold certificates for gold coins. It then immediately revalued gold from $20.67 per troy ounce to $35, thus devaluing the dollar holdings of all Americans by 40 percent.
* 1934 to 1968, the federal government continued to issue and redeem silver certificates, notes that circulated as legal tender that could be redeemed for silver coins or silver bars. In 1968, Congress unilaterally reneged on this obligation.
* 1934 to 1971, foreign governments were permitted by the U.S. government to exchange their dollars for gold through the gold window. In 1971, President Richard Nixon severed this final link between the dollar and gold by closing the gold window, thus in effect defaulting once again on a debt obligation of the U.S. government.
It’s easy to blame Pelosi and Reed and Krugman because they are very guilty. The Republicans haven’t done much better true, but because of reason 5) in the original article, not reason 1). There’s a world of difference between not doing something because its to your personal advantage and to hell with everyone else, and on the other hand not doing something because its not possible politically to do.
Defense is one of the few things the Federal government does that are legitimate functions of government.
Why should we cut a legitimate function to preserve illegitimate functions?
We could actually cut the military if we were energy-independent, but not before that.
Right now I am about 20 years from retirement. With about 10 more years of work I will have enough savings to pay for a very modest retirement along with paying back my share of the debt ($65k). I could do that without taking Social Security (I’m hoping for an opt-out option). Medicare is another story however, there’s no way I could afford health care when get old mainly due to it being ratcheted up by government mandates, predatory lawyers, and the doctors guild.