Smoltering Financial Ruin
Ralph Profitt | February 10, 2019

This road to ruin is simply not sustainable if we have any serious intentions of preserving and maintaining a truly prosperous and stable society.   Eventually, both ourselves and lawmakers are going to need reduce exorbitant spending, rise income, or both.

During a Hollywood movie scene of a dramatic Courtroom confrontation, two opposing adversaries are shouting loudly at each other.   During the trial, the prosecuting attorney challenges the defendant:   “Just tell us the truth: we need to know”.   The defendant angrily replies:   “You cannot handle the truth.”
Is that where we are today?   Wanting and needing to know the truth and reality about things, but either afraid, cautious, or unwilling to face up to all its potential implications and consequences?   Can we handle the truth; especially when it comes to our own personal and National finance?
The truth:   With all its revelations and disclosing insights, can sometimes be startling, uncomfortable, and painful to behold.   Yet, it does not take away from the need of ancient advice:   “To thy own self be true.

And that is the challenges and current realities we need to face when surveying the personal and National finances of both our people and where this great Nation is dangerously headed.   Contrary to some of the more popular notices of our presumed prosperity, we are in reality “broke”:   Living with misleading illusions when confronting our present and future unfunded liabilities.

Our present economy may appear sound, but we are actually on shaky ground.
Evidence:

Tax rates 84% of the wealthy received the 2018 tax cuts.

Increased spending
The 2018 deficit is expected to reach one trillion dollars.
A 33% jump in one year.
Averages $2300 per person.

Federal debt
$21.5 trillion dollars.
$66,350 per person.
Unfunded government liabilities in excess of $200 trillion.
Interest on the debt: $492.5 billion.
$1,100 per person.
Money that cannot be spent for worthy needs: research, health care, infrastructure, transportation, and other worthy needs.

National federal income
$3.3 trillion dollars.
$10,000 per person.
But our spending: $4.1 trillion dollars.
Almost half of every dollar spent is borrowed money.



Personal finances
Individual credit card debt: $6,375.
Household credit card debt: $16,883.
Household credit card interest: $1,292.
43% of credit card holders carry unpaid balances over two years.
Personal set-aside savings: 1% of personal earnings.
Less than several hundred dollars for emergencies.
Most households are living paycheck to paycheck.
The Trump administration is suggesting this unusually dramatic increase in consumer credit card debt is further evidence of how sound and well managed the overall economy is presently doing.   The recent government shutdown proved this suggestion to be totally wrong.   Even more affluent wage earners are struggling to "make ends meet".

Consumer loans
Outstanding students loans total $1.5 trillion.
38% are in arrears.
Outstanding auto loans: $1.22 trillion.
Subprime delinquent auto payments running 16.3%.
Home mortgages are totaling $8.8 trillion.

Corporate debt
$6.3 trillion.
45% of total GDP.

One cannot deny:   The explosive financial perils we now find ourselves.   Neither public nor privately:   can one continue endlessly spending more than what we earn or save.   The consequences will be painful, horrid and sobering, especially with a major recession on the horizon.

This road to ruin is simply not sustainable if we have any serious intentions of preserving and maintaining a truly prosperous and stable society.   Eventually, both ourselves and lawmakers are going to need reduce exorbitant spending, rise income, or both.
Distressful choices cannot be avoided if we hope to endure and achieve other possibilities.   To think otherwise is like trying to dribble a football in a basketball game:
A total waste of time and effort.

Sources:
"The Week" magazine:   https://theweek.com/
"Magnifymoney.com:   https://www.magnifymoney.com/
"Thebalance":   https://www.thebalance.com/
"Forbes.com":   https://www.forbes.com/
"Moodysanalytics":   https://www.moodysanalytics.com/



 
 


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