Debt, Debt, Debt, and more D$$$$$$$! Why??

 

Has America managed their finances in a prudent manner these past 37 years (since 1980)? Let’s look at the numbers which reveal our discipline in managing our financial affairs. You can verify these numbers at: http://www.usdebtclock.org:

1. Total Local Debt:             $1.945 trillion        (9.3 fold increase since 1980…or 9300%)
2. Total State Debt:              $1.219 trillion        (10.5 fold increase)
3. Total National Debt:       $19.965 trillion     (22 fold increase)
4. Mortgage Debt:                 $14.528 trillion     (10.4 fold increase)
5. Credit Card Debt:             $1.03 trillion         (8.3 fold increase)
6. Student Debt:                    $1.463 trillion       (no info for 1980)
7. Total U.S. Debt:                $67.617 trillion     (33 fold increase)
8. Trade Deficit (goods):    $768.3 billion       (26 fold increase since 1980)

Have Americans been living above their means these past 37 years? I think so. We have borrowed and borrowed (and borrowed) to maintain our prosperity and our exceptional lifestyle. Much of this at the expense of the world’s citizens who provided us the goods. America has 4.4% of the world’s population yet we consume some 23.6% of Global production. How can this happen? Why this favoritism?

What happens is that America has the ‘reserve’ currency for the planet and we can buy goods and services (without any penalty/restriction) from ALL nations. America can buy on credit (debt) from all 200+ countries on our planet. We can consume much more than we produce (in exchange) as we are essentially the BANKER for the planet. Our dollar ($) is accepted mostly everywhere and this allows us to consume beyond what other countries are capable of doing (given their situation).

Other countries (say Chile, Cuba, Venezuela, Columbia, Libya, Senegal, Sudan, Vietnam, India, Thailand, Russia, Afghanistan, Syria, most of Africa, etc.) do not have a reserve currency which is accepted by all nations. This means that these (less favored) countries must live mostly by their own production and via a much lower level of borrowing. Every country borrows to a degree but America can BORROW to excess (as we have a currency which every other nation desires). The SYSTEM favors America!

So is America an exceptional nation (economically) or are we mostly exceptional in taking ADVANTAGE of the System? Are we ‘giving’ an equivalent amount to what we ‘take’ from the planet? This is an important issue in economics. It appears that America does ‘take’ more than they ‘give’ (especially in consumer products and the goods sector of the world economy). Why do we run trade deficits every year to the tune of billions (today some $768 billion)? This has been happening every year since 1976. The cumulative trade deficits have exceeded some $12 trillion.

If America was ‘giving’ to the planet in proportion to what we are ‘taking’ from the planet, then our trade deficit should be closer to zero (not $768 billion or some $12 trillion since 1976). Our debt situation should be much less and our manufacturing should be much higher. We should also have a currency which creates ‘discipline’ so that production is in balance with our consumption. Having the ‘reserve’ currency for the planet provides us (you and I) ENORMOUS advantages and creates huge suffering for many others on our planet! This is all due to the SYSTEM (as it is set up)!

When you look at the numbers above, think about the BIG picture (the entire planet of 7.4 billion people). We now live in an interconnected global society where each person should be viewed as an equal (economically). Does our SYSTEM allow for this equality of prosperity? I don’t think so! America has 4.4% of the World’s population (325 million of 7.4 billion) and we consume some 23.6% of gross world production. Is this fair? The SYSTEM is the problem! Think on this! I am: https://kingdomecon.wordpress.com.

Some images for you do consider:

Since 1944 (the Bretton Woods Agreement) America has had the RESERVE currency for the planet! Why?

America’s GDP is $18.5 trillion or some 23.6% of the World’s Gross National Product!

America represents some 4.3% of the World’s population yet consumes some 23.6% of the World’s production!

 

America’s share of World GDP is around 23.6% and our population is only 4.4% of the World’s population!

Are American’s that exceptional or do American’s take ADVANTAGE of the current SYSTEM? What do you think?