Rethinking Debt

American delusion of unlimited borrowing, consumption and debt spending to come to an end

(NaturalNews) Right now, it’s pretty easy to disbelieve anyone who is trying to sound the alarm that something bad could ever happen to America.

It’s easy, while sitting in the comfort of our homes, watching life go on around us, to dismiss as fear-mongering anyone who tries to shatter the images of calm with dire predictions of calamity and chaos – just around the corner.

I get that. Believing that everything is okay – well, pretending that everything is okay – is a helluva lot easier than contemplating disaster and what to do when it happens.

And yet, that’s exactly what is liable to get so many Americans killed – or worse yet, enslaved (because I agree with our founding philosophers who believed it is worse to live in chains than to die a free man): This mistaken belief that, no matter what, our country will survive anything.

It’s the debt – and borrowing – stupid

But unlimited borrowing, risky fiscal and economic policies built on lies and the government’s addiction to spending will take its toll on our country, sooner or later. As we have already begun to see in socialist Europe – eventually, the politicians, seeking votes, promise far more in benefits than the beleaguered, taxpaying public can support; and when that happens, the system – the serene life as we know it – will come crashing down around us.

The experts have already begun to sound the alarm bells. Thorsten Polleit, writing for the Ludwig von Mises Institute, a libertarian-leaning group advocating the economic and fiscal policies of its Austrian namesake, notes:

The current upward dynamic of the debt-to-GDP ratio is economically unsustainable. It cannot go on forever. To see this, let us assume that the total debt-to-GDP ratio does continue to grow at the average rate at which it has expanded from Q1 1971 to Q2 2009… The total debt-to-GDP ratio would exceed 600 percent at the start of 2029 and reach more than 1000 percent in 2050.

Admittedly, we do not know how much debt relative to GDP an economy can shoulder. And, of course, there might even be good reasons for the ratio to rise over time. … One thing is clear, though: the level of debt relative to income cannot rise without limit. This insight is important, given that there is strong reason to believe that the extraordinary rise in the debt-to-GDP ratio is a result of the government-controlled, fiat-money system in which the money supply is increased through bank lending.

‘We haven’t even gotten people to understand the charade that we have’

Bill Fleckenstein, president of Fleckenstein Capital, who writes a popular column called “Contrarian Chronicles” for MSN Money, said this in a recent interview with King World News:

Right now, people continue to believe that the same idiots that created all of these problems, namely the central banks, are going to somehow get us out of it with the exact same policies that got us into it, only at a much higher (aggressive) level of pursuing those policies. …

We haven’t even gotten people to understand the charade that we have. … What the masses have done over and over again is to believe one more time that it’s all going to be OK … We are in a unique moment in history. The whole world is printing confetti, and (yet) people seem to think that’s going to work out fine.

The longer you keep pursuing insane policies, the more you pile (them) on top of each other, the worse it gets … So, when the Fed can’t print money and we have to deal with this, it’s going to be brutal.

What’s more, even the government’s own fiscal watchdog is saying the exact same thing. From a revised Congressional Budget Office report in May:

The Congressional Budget Office’s updated budget outlook projects that, under the baseline rules the agency is required by law to follow, spending will total $46.677 trillion over the next 10 years, revenues will total $40.336 trillion, and the debt will climb to $25.228 trillion by the end of 2023.

That’s unsustainable, period.

But then again, we’ve been warned. What we are prepared to do about it, as a people, remains to be seen.

Changing Views of Consumerism

Americans’ Attitude Toward Consumption May Be Shifting

BusinessNewsDaily Staff
Date: 28 February 2012 Time: 11:21 AM ET

 

greed, hoarding, money, generousity
CREDIT: Dreamstime

Marketers trying to keep their finger on the pulse of American consumers’ shopping preferences may want to take notice of a new survey that suggests Americans are becoming more concerned with substance than they are with appearances.

That’s the finding of a new survey from mini car makersmart USA and Harris Interactive which found that the majority of Americans surveyed preferred smarts and substance over good looks or flashy material possessions.

The survey, which was conducted online in December and included more than 2,000 American  adults, found that 88 percent – both young and old, male and female – would prefer to date a person who is intelligent and philanthropic over someone who is simply attractive.

The survey also found the following:

  • Nearly 7 out of 10 (69 percent) Americans would prefer their spouse to speak another language than have washboard abs
  • Almost 3 in 5 (59 percent) Americans would rather have their partner gain 20 I.Q. points than lose 20 pounds
  • An astonishing 95 percent of women and 80 percent of men would prefer to date someone who is smart and philanthropic like Reese Witherspoon or George Clooney than someone with a pretty/handsome face like Megan Fox or Alex Rodriguez

Survey respondents also indicated that their days of over consumption may be numbered.

  • 97 percent of Americans believe that at least some of the items in their household are junk (i.e., they could easily get rid of it)
  • Nearly one out of 10 (9 percent)  Americans believe they can part with a full half of their stuff
  • 9 percent of Americans believe that 51-100 percent of the items in their household are junk

“The fact that a majority of Americans are deeply concerned with right-sizing their lifestyles and making intelligent choices shows why smart has so much curb appeal today,” says smart USA General Manager Tracey Matura. “People are rethinking whether bigger is actually better and focusing instead on value. They’re looking at how they can cut down the clutter in their lives, whether in their choice of vehicle, home or other purchases, so they have fewer, better things rather than simply more, more, more. And smart is proof that good things do come in small packages.”

http://www.livescience.com/18699-americans-consumption-shifting.html