Magnitude of Debt Makes U.S. Open to Economic Attack – Even Defeat!
The sovereign debt issues of Europe [most recently in Portugal] will soon pale in comparison to the sovereign debt issues of the United States. They are merely the forerunner to the…crisis percolating in Washington and the fifty state capitals. The financial irresponsibility of our elected officials has provided a determined enemy a powerful weapon to use against us in an economic attack. [Let me explain.] Words: 717
So says Frank Ryan (www.americanthinker.com) in an article* which Lorimer Wilson, editor of www.munKNEE.com, has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.) Ryan goes on to say:
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The failure to understand our vulnerabilities with our debt and the strategic bind we have put ourselves in will lead to tragic consequences…The spiraling deficits, unfunded pension liabilities, and the retirement of baby boomers means that the perfect storm is headed our way.
10 Reasons America is Susceptible to Economic Attack
- Our national debt of over $14.11 trillion… is being financed with unrealistically low interest rates, which makes us susceptible to greater budget difficulties should short-term interest rates merely go back to 3%.
- The vast majority of our debt at the federal level is funded with short-term debt maturing in five years or less, making the U.S. strategically vulnerable to refinancing our debt.
- The recent extension of tax rates was needed, but what was not needed without other budget cuts was an additional reduction of social security taxes for two years that adds another $1 trillion to the $14-trillion in debt. The reduction in social security rates may have been important to stave off a depression, but it will not have that effect unless Congress reins in other spending.
- The unfunded state government and teacher pension liabilities means that property taxes will escalate, putting more homeowners and banks in severe jeopardy. Remember that property taxes are a senior lien to mortgages, so banks are at a real risk.
- The coming retirement of so many baby boomers with the resultant lower taxes they pay and higher medical costs of an aging population will drain governmental budgets.
- A bankrupt Social Security system will not fix itself.
- A costly, broken, and fatal health care bill and medical system will collapse under their own weight. The mere aging of the health care providers and their coming retirements will make managing health care costs almost impossible.
- Sovereign debt of the rest of Europe is crushing them, and it will crush us. Our allies in Europe will not be able to bail us out, forcing us to rely on China or the Far East.
- Government bureaucracy will crush business growth and development. The sheer number of new regulations will make the entire nation an airline industry prototype.
- The prospects for neutralizing these risks are diminishing.
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Debt Reduction is the Best Defense!
…A determined enemy attacks where one has become vulnerable [and as such] there is only one true solution – we must go on a diet! Every American must put self-interests on the back burner and put selfless sacrifice on the front burner. We must all be willing to contribute to this fight. It is no longer our decision. Restrain spending on all fronts, or someone else will do it for you. Just ask the Greeks!
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
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