Is America Sinking into Hopeless Debt?
After reading this article on Yahoo about the ever-growing national debt, I took a look at the U.S. National Debt Clock. Not only are we having record deficits each year, but the debt per American has reached unsustainable levels.
As you can see, the debt has reached $42,698 per American! And, $119,524 per taxpayer. The average savings in America is a small percentage of these figures.
How is this ever going to get repaid?
I think it is pretty obvious that it will never be repaid, but most people don’t see a problem. They continue to buy treasury notes because they believe that the U.S. government is an extremely safe investment. People always assume it is safe until it is too late.
The exact same thing happened with the bailouts of 2008. Everyone assumed that giants like AIG were perfectly safe. They would have all gone bankrupt if the government hadn’t saved them. So, here’s the question. Who is going to save the government?
One reason that I am particularly concerned about the national debt is that it is completely ignored by the media. And, that means that 99% of the people are pretty much unaware of it. I think that at least 99% of the people don’t think it is a problem. Since people are not worried about it, there is no impetus to make a change. The problem just gets worse and worse until the politicians have no choice but to do something.
While most people are blissfully unaware of the problem, it will affect them profoundly. When the government runs out of money, it will not be able to pay for Social Security and Medicare. And, if it decides to print more money, then inflation will take off. This will wipe out the middle class and most people’s life savings as well.
So, what’s the solution? One solution is to invest in gold and gold producing assets like mining companies. Another is to buy commodities such as oil and silver, and the associated companies that support these industries. I can’t tell you an exact strategy that is “best”. I can only suggest getting educated about the problem and learning more.
If we get educated about what is happening as well as the history of empires and debt, then we can position ourselves to survive the chaos. In fact, we can make it work for us. Why see your finances ruined when you can make money instead?
So, where is the best place to start this education? One of the best books I have read about this subject is Rich Dad’s Guide to Investing In Gold and Silver. I think that it is in each person’s best interest to find out the risks of future financial turmoil, and put together a plan to survive and thrive.
Related posts:
- The Rise and Fall of America
- America’s Empire of Debt
- Is America’s Heyday Over?
- Is the Dollar Dead?
- Is Gold Making a New High?
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I'm George Ulmer. Matt and I started this blog and launched the Online Investing AI business. Our goal is to develop the technology to allow anyone to retire after working for 10 years.
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
I would be very careful at this point investing in precious metals. Their prices have run up sharply and you may have missed the boat. You may be making the classic mistake of “buying high”. Stocks, on the other hand are relatively cheap by most metrics.
You are correct to worry about the debt overload. The U.S. has worked itself into a position where we need to protect our interests (read: energy sources) around the world and hence have this enormous defense budget. We also have made promises in terms of Social Security and Medicare that we can’t keep. It’s the old “guns and butter” problem – we want it all and it just isn’t going to work.
There is a great youtube on this by googling IOUSA. It illustrates your point on how unaware people are of the problems the country faces.
Yes, it’s true that precious metals have gone up a lot in the last few years. But compared to other factors like the money supply and debt I don’t think that they are very high. They are only high in nominal terms.
Thanks for the youtube video. I’ll check it out.