Drowning in Red Ink
This week the national debt topped out at over $16,000,000,000,000. I guess that is why the official logo of the Democratic National Convention looks as if the Obama "O" has people drowning in red ink. If the logo is viewed upside down it resembles the Sherwin Williams logo.
All that is missing is a slogan like "Cover the Earth in Red Ink." No matter what perspective is used there is no arguing that the country is now awash in a sea of red ink.
To keep pace with federal expenditures, we now borrow 42¢ out of every dollar that is spent. This insatiable appetite of the federal government to borrow and spend as if it does not matter resulted in the historic downgrade of our national credit rating. We now hold the lofty title of being the largest debtor nation in the world.
Except for a few years in the 1990s, the federal budget has not been balanced in living memory. This has resulted in an attitude on the part of the public that operating without a balanced budget is OK. But it is not OK, we need only to look at the governments of Spain and Greece to see that irresponsible spending can lead to financial chaos.
We have borrowed so much money that we are no longer able to contain our debt within our own borders. We now have to borrow money from other nations. According to the U.S. Department of Treasury, 22% of the national debt is owed to foreign interests. Each taxpayer's share of the national debt is close to $170,000. So now you owe foreign governments like Japan, China and others more than $37,000. Yes you owe them that sum. You see Washington views your income as collateral that it can barrow against at any time it wants. But fewer people have income now, so the burden of this debt shifts to fewer and fewer people, which only make this scheme more unstable and prone to collapse.
The Treasury Department breaks down the foreign debt ownership in the following way: 24% of the foreign debt is owed to China, 21% is held by Japan the remaining 55% of the foreign held debt is owed to other governments like Russia, private foreign interests and individuals.
I think it is so strange that Thomas Jefferson is credited with the founding of the Democratic Party when it was Jefferson that wrote:
"I place economy among the first and most important virtues, and public debt as the greatest of dangers."