The national and global discourse makes this association: Debt is to good financial practice as cancer is to good health. We’re now seeing the cancerous results of debt-centered financial practice worldwide, as countries are being eaten alive by debt, with some on the brink of collapse. We’ve been saying for decades that this day would come, and our reaping must follow our sowing. But there’s a very personal aspect of this I have only recently realized.
We’ve all heard stories of a well-off married couple, man and wife (using an outdated definition of marriage, but sufficient for our purposes), where the man dies unexpectedly. Turns out that he had no life insurance. Turns out he had $50K in credit card debt. Turns out he mortgaged the house and wasted it all in Vegas. Turns out, after all the figures come in, the wife is now hundreds of thousands of dollars in debt. We shake our heads and murmur a tsk tsk. How could he?
After all, they were living pretty well. House on the lake. Vacation home in the mountains. Beautiful children. Pretty well indeed. Tsk tsk.
This story, is, of course, an illustration of what’s happening to us as a nation, and to other peoples of other nations. Our partner, government, is doing us wrong. We lived our lives not completely ignorant of what was going on, but lazy enough not to stop it. We heard the warnings, but were not very motivated to heed them. We heard about the fiscal cliff a few years ago, not realizing that we sailed off the cliff in the 1950s or 1960s, maybe before, and now we are in free fall. They say it’s not the fall that kills you, but the sudden stop at the bottom, and our partner cares nary a bit.
As I look back over my fifty-plus year life in America, growing up in a medium-sized city, attending average public schools, going to public college, and working regular jobs as a regular guy, I’m realizing that a large proportion of my America was bought with borrowed money. Think about all the things that massive debt spending has, in part, purchased.
- Interstate and most other highways
- Public utilities
- Public schools
- Moonwalks and space exploration
- Agricultural advances
- Basic scientific research
- The Internet
- All things retirement
Tax revenues and borrowed money have been mixed to pay for these items, the proportions being muddled, but we can get an idea by looking at the Federal deficit over the years. Since 1930, the government has run deficits in 74 of the 87 years. (See historical figures published by OMB.) From 2006 to 2015, the average of deficits has been 770 billion dollars, per year.
