(December 03, 2017) - Last week, Dickinson County News published an
article outlining the debt load of County and municipal governments in Dickinson
County. That debt figure involves only a portion of the debt held by the local
units of government, and does not include debt held by the school districts or
that owed in the form of municipal bonds.
While many only yawn when confronted with these numbers, they fail to
recognize that these debts are going to affect every person in this Country,
affecting everything from the prices you pay for goods to your retirement and
your health care.
The U.S. dollar is regarded as the World's reserve
currency. This means that the dollar can be used in virtually every country in
the World (with a few exceptions). It is considered the “safe haven" for parking
money, and is used in the majority of major business transactions around the
Americans enjoy many benefits from this status including lower
interest rates on government debt and lower pricing on a wide variety of goods
Many economists, both inside and outside of the U.S. are
now questioning how long this will continue considering the almost unbelievable
level of debt load held by government at all levels.
Here's a look at the latest estimates on those numbers:
Government debt: $18,960,000,000,000
Debt held by us states:
Debt held by local governments: $1,880,000,000,000
Most of this represents unfunded debt, meaning that there is no clear plan or
strategy to pay it down.
The National debt represents a liability for
every man, woman and child of nearly $60,000. Compare this with the European
Union, which has a similar debt of an estimated 18 trillion dollars. However,
with a population of 710 million persons, the individual debt load is less than
half at slightly over $25,000.
We constantly hear about the poor State of
the Russian economy. Yet Russia's total estimated federal debt is under 105
billion dollars, or $1,400 per person.
The State of Michigan ranks tenth
in the Nation in government debt holding 5.22 billion dollars in outstanding
bonds and other debts. However, the State ranks near the center of the list of
State indebtedness at #23. Individually the debt load on each Michigan resident
is only half of the National average; estimated at slightly over $700, compared
to a National average of slightly over $1,400 per state.
in the Congress and the White House have been unwilling to make any serious
effort at bringing this ticking bomb under control, the matter of when that
“bomb” will explode is well beyond their control.
There has been serious
discussion among many nations in recent years as to whether they can continue to
trust the U.S. dollar as the World's reserve currency. Many have suggested
switching to the Chinese yen, and in fact a growing amount of trade around the
World today is being conducted using the yen as the base currency. However,
major commodities such as oil continue to be traded with U.S. dollars.
While no one is willing to predict if or when the U.S. dollar might lose its
status as the International Reserve Currency, many believe it doesn't matter. As
a practical matter, more international trade is moving away from the U.S. dollar
as our debts mount, including the Euro and the yen. If this continues at it's
current pace, the title Reserve Currency may become nothing more than an empty
How much do you owe?
National debt - $60,000
Local debt -
$8,000 to $10,000
State debt - $710
How is this likely to affect you?
Within the past several weeks we have heard House Speaker Paul Ryan state that
if the tax cut bill currently working it's way through Congress does not produce
the desired results, it will likely be necessary to seek cuts in Social
Security, Medicare and Medicaid.
Would these cuts be justified?
Absolutely not, say most economists.
Since it's introduction and passage
by President Franklin Roosevelt in 1936, the Social Security administration has
run a surplus every year. There should be enough money in the trust fund to
easily finance the program through the heavy burden placed on it by the
retirements of the "baby boomers."
Yet the program is in such dire
financial shape that cuts must be made to benefits, and retirement ages raised.
The answer is simple. In April of 1983, President Ronald Reagan
signed legislations which allowed the Government to play games with the Social
Security trust fund. While not officially eliminating the trust fund, it
became part of the Nation's "General Fund." Since that time, Congress has
continued to rob the trust fund to finance other spending. Today, the Government
owes the trust fund 2.88 trillion dollars; money collected from all of us,
supposedly to insure a safe retirement.
Instead it has gone to finance a self-destructive, bankrupting
foreign policy, which is being escalated under the current administration.
Many economists call this the "greatest theft in the history of the World."
And like a noxious weed, the debt just keeps growing, and that “time bomb" keeps