The 15 Trillion Dollar Party
If you knew that you could live in luxury for the rest of your life but that by doing so it would absolutely destroy the future for your children, your grandchildren and your great-grandchildren would you do it? Well, that is exactly what we are doing as a nation. Over the past several decades, we have stolen 15 trillion dollars from future generations so that we could enjoy a dramatically inflated level of prosperity. Our 15 trillion dollar party has been a lot of fun, but what we have done to our children and our grandchildren has been beyond criminal. We ran up the greatest mountain of debt in the history of the planet and we are sticking them with the bill. Sadly, both political parties have been responsible for the big spending that has been going on. Both Democrats and Republicans have run up huge budget deficits when in power. But instead of learning the hard lessons of the past, both political parties continue to vote for even more debt. They would rather continue to steal trillions of dollars from future generations than have the party end and have to face the consequences.
And the consequences will be dramatic when the party ends. During fiscal year 2011, the U.S. government spent 3.7 trillion dollars but it only brought in 2.4 trillion dollars. That means that the U.S. government spent about 1.3 trillion dollars that it did not have. It is important to understand that even if the U.S. government spent that 1.3 trillion dollars on really stupid things, that money still got into the pockets of ordinary Americans who then spent it on things like food, gas, housing, etc. In turn, most of those that received money from providing those goods and services would spend it on other things.
So extra government spending can definitely stimulate the economy. The problem is that we have been doing it permanently. Since 1975, we have added more than 15 trillion dollars to the national debt. This has fueled a false prosperity that was way beyond what we could afford.
If the U.S. government tried to go to a balanced budget now, our standard of living would crash and there would be riots in the streets. The American people have been enjoying false prosperity for so long that they have lost any notion of what “normal” actually is.
Think of it this way. If your family makes $40,000 this year and you spend an extra $20,000 on your credit cards, your family would be enjoying a false sense of prosperity.
You could do that year after year as long as the credit card companies keep loaning you more money.
But debt always catches up with you in the end.