Worrisome National Debt: What We Need To Do

Worrisome National Debt
by JBS President Emeritus John F. McManus

Close to 50 years ago, a fairly widespread put-down of worries about the national debt included the ridiculous claim that federal indebtedness was nothing to worry about because “we owe it to ourselves.” Anyone trying to get his portion would find how ridiculous that claim was. And 50 years ago, the national debt was less than five percent of the astronomical total that has been reached today.

The United States has become the greatest debtor nation in all history. This is a situation that ought to be front-page news every day – but it isn’t (Photo from Flickr by Chris Potter www.ccPixs.com, CC BY 2.0).

At the end of the first week in May 2017, the admitted national debt stood at $19.9 trillion. That’s $19,900,000,000,000, an amount hard even to imagine. Before the current month passes into history, the $20 trillion plateau will be reached. Can a nation spend itself into extinction? The answer is yes. And our nation is doing exactly that. Let’s look at some figures.

When the U.S. government spends more than it takes in, it borrows. It might seem a bit unbelievable, but one of the two greatest holders of U.S. government debt is Communist China. The Beijing regime and Japan each hold more than $1 trillion in IOUs signed by U.S. officials. This means that our government is in hock to China, not only for the amount the Chinese Reds provided, but also for interest on the trillion dollars they have provided.

China happens to be a country whose leaders have declared America to be an enemy they seek to destroy. Beyond what is sent to China annually, interest payments go to Japan, Britain, Ireland, Switzerland, and numerous other countries holding U.S. bonds. And, of course, many American citizens have loaned money to the government, and they have to be paid interest as well.

Interest payments to other countries – and to any private individual who holds a U.S. bond – total $442 billion per year. That’s not too far from the current annual deficit. If there were no need to send interest payments to existing creditors, Congress and the president might be able to balance the budget. But interest has to be paid.

The situation described above isn’t the whole story. The $19.9 trillion admitted indebtedness happens to be a grossly incomplete amount because unfunded future obligations aren’t considered. The two largest and unfunded federal programs are Medicare/Medicaid and Social Security. These two currently spend more that $2 trillion per year and the money to keep them going has to be borrowed. The noose around our country’s neck is getting tighter every day.

The United States has become the greatest debtor nation in all history. This is a situation that ought to be front-page news every day – but it isn’t. It ought to be the lead item on the daily newscasts on television and radio – but it isn’t. It ought to be a topic for serious examination in economics classes at colleges and even high schools – but it isn’t.

The accumulated national debt of the United States arrived at the $1 trillion figure during the Reagan administration. Each succeeding president (Bush I, Clinton, Bush II, and Obama) has presided over steadily worsening increases. Annual deficit spending and borrowing to cover it reached new highs during the Obama years. The George W. Bush years weren’t much better.

Just a brief glimpse at all of this red ink is frightening. So, the question arises: What to do about it? How about terminating foreign aid? America, drowning in debt, actually gives away money. How about getting the federal government out of education, energy, medical care, and other areas where it has no constitutional authorization to be involved? How about putting an end to the U.S. military being the policeman of the world?

In other words, how about a real change at the top that would see our leaders standing solidly behind their oath to abide by the Constitution? If they would honor their oath, deficit spending would cease, paying off creditors would begin, and America would soon cease being in hock to other nations – especially to any that are sworn enemies.

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McManus_2Mr. McManus served in the U.S. Marine Corps in the late 1950s and joined the staff of The John Birch Society in August 1966. He has served various roles for the organization including Field Coordinator, Director of Public Affairs, and President. Mr. McManus has appeared on hundreds of radio and television programs and is also author of a number of educational DVDs and books. Now President Emeritus, he continues his involvement with the Society through public speaking and writing for this blog, the JBS Bulletin, and The New American.

Our Threatening National Debt

Our Threatening National Debt
by JBS President Emeritus John F. McManus

When a new president takes office, he is saddled with a budget agreed to by his predecessor for the first nine months of his term. This procedure occurs because the federal fiscal year begins on the first day of October every year. Therefore the additions to the national debt attributable to Barack Obama’s eight years in office are not complete. But we can get an idea of the increase under his watch by looking at what is rightfully attributable to his leadership.

National Debt Increases from 2001 to 2016 (Image from Wikimedia Commons).

National Debt Increases from 2001 to 2016 (image from Farcaster at English Wikipedia [CC BY-SA 3.0 or GFDL], via Wikimedia Commons).

Author/commentator Terence Jeffrey claims the red ink accumulated by Mr. Obama totaled $9,335,000,000,000 on the day he left office. That’s $9.3 trillion. The previous deficit accumulated by a two-term president was $4.9 trillion for the George W. Bush years (2201-2009). That’s a little bit above half of what his successor, Barack Obama, piled up.

Congress produces a federal budget. A president can veto what he is given but presidents rarely use that constitutional power because no occupant of the White House wants the blame for government shutdown. So the planned deficit wins approval and the nation proceeds down a path to extinction. Extinction? Yes, the indebtedness cannot continue. As the old saying goes, “The piper will be paid.” Who might that “piper” be? Probably world government with total power.

A review of past decades and the indebtedness amassed by a succession of president indicates ascending guilt for each of the past 13 chief executives. They have all contributed to placing our nation’s neck in a noose, the most recent being the worst culprits. Here are some debt figures supplied by the Treasury Department.

Roosevelt (1933-1945) $.236 trillion, up 1,048% from Hoover

Truman (1945-1953) $.007 trillion, up 3% from Roosevelt

Eisenhower (1953-1961) $.023 trillion, up 9% from Truman

Kennedy (1961-1963) $.023 trillion, up 8% from Eisenhower

Johnson (1963-1969) $.042 trillion, up 13% from Kennedy

Nixon (1969-1974) $.121 trillion, up 34% from Johnson

Ford (1974-1977) $.224 trillion, up 47% from Nixon

Carter (1977-1981) $.299 trillion, up 43% from Ford

Reagan (1981-1989) $1.860 trillion, up 186% from Carter

Bush I (1989-1993) $1.554 trillion, up 54% from Reagan

Clinton (1993-2001) $1.396 trillion, up 32 % from Bush

Bush II (2001-2009) $5.849 trillion, up 101% from Clinton

Obama (2009-2017) $7.917 trillion, up 68% from Bush II

(The figure for the Obama years is not complete.)

The largest percentage increase (186%) occurred during the Reagan years when the debt total flew through the $1 trillion plateau. The largest dollar increase occurred during the Obama years (not yet complete).

What does all this mean? It means the U.S. government is spending the nation into bankruptcy. As economic guru Doug Casey states: “Giving politicians the ability to borrow is like giving a teenager a bottle of whiskey and the keys to a Corvette. The debt is an albatross around the necks of the next several generations: it’s criminal to make indentured servants out of people who aren’t even born yet.”

Congress is the key to either fiscal sanity or fiscal suicide. If you value freedom and love your children, let your representative and your two senators hear from you.

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McManus_2Mr. McManus served in the U.S. Marine Corps in the late 1950s and joined the staff of The John Birch Society in August 1966. He has served various roles for the organization including Field Coordinator, Director of Public Affairs, and President. Mr. McManus has appeared on hundreds of radio and television programs and is also author of a number of educational DVDs and books. Now President Emeritus, he continues his involvement with the Society through public speaking and writing for this blog, the JBS Bulletin, and The New American.

Deficits Invite Catastrophe

Deficits Invite Catastrophe
by JBS President John F. McManus

Former Michigan Congressman David Stockman (1977-1981) accepted appointment as Director of the Office of Management and Budget at the launching of the Reagan administration in 1981. He stayed in that post until 1985 and left forecasting larger deficits than had ever been compiled by any previous president. He now issues his thoughts about the nation’s finances in what is called “Stockman’s Corner.”

In a recent posting, Stockman recalled that the national debt went beyond the $1 trillion plateau on October 22, 1981. His pointing this out reminded me of the “No Trillion Dollar Debt” campaign waged by The John Birch Society during that year. It was surely not one of the organization’s most successful efforts.

Stockman noted that it took 205 years to compile a single trillion dollars of indebtedness. He calculated that all those years added up to 74,984 days. But the admitted national debt, now at $18 trillion, saw its latest addition of a $1 trillion dollars added to the debt total in a single 365-day year.

We often hear that President Reagan created a minimal government and was as thrifty with the people’s money as any president had ever been. But the figures tell a different story. The Reagan-G.H.W. Bush years (1981-1993) produced three times the average annual deficit that had been amassed during the peacetime years led by Democrats Franklin Roosevelt, John Kennedy, Lyndon Johnson and Jimmy Carter combined. Stockman even quotes Dick Cheney, who served in the first Bush administration, saying “deficits don’t matter.” The problem is that they do matter – very much.

Stockman expects the unrestrained government will add “at least $15 trillion of new public debt in the decade ahead.” That amount of accumulated red ink added to the total will likely top the Gross Domestic Product (GDP) for the year 2024.

What does all of this mean for Americans? It means that the future will grow dimmer every year, and that the nation will become more seriously beholden to creditors such as communist-led China that has vowed to destroy the U.S.

There is no way out of this increasingly grim situation but a sharp cutback in federal spending. Instead, led by a President who cares little about deficits and by leaders of both political parties who are strongly disinclined to cease buying votes with the people’s money and the Federal Reserve’s continual creation of dollars backed by nothing, the outlook for fiscal sanity appears extremely poor.

Over the years, Stockman has stated that “the Republican Party has totally abdicated its job … as guardian of fiscal discipline” and that the GOP “was hijacked by modern imperialists during the Reagan era.” Correct! As for himself, he has stated that he “invests in anything that Bernanke can’t destroy, including gold, canned beans, bottled water and flashlight batteries.”

Of course, Ben Bernanke no longer sits atop the Federal Reserve. The privately owned and completely unconstitutional Fed is led by Janet Yellen. There is no reason to expect any change in America’s suicidal fiscal policies.

Mr. McManus joined the staff of The John Birch Society in August 1966 and has served various roles for the organization including Field Coordinator, Director of Public Affairs, and now President. He remains the Society’s chief media representative throughout the nation and has appeared on hundreds of radio and television programs. Mr. McManus is also Publisher of The New American magazine and author of a number of educational DVDs and books.

The Rising Amount of Student Debt

The Rising Amount of Student Debt
by JBS President John F. McManus

According to The Institute for College Access & Success, seven out of ten 2012 college graduates incur student loan debt. The average per indebted student totals $29,400. The required monthly payment on that burden takes $350 out of whatever salary is earned – if the graduate can find a job and earn a salary. If no job, the monthly payment must still be made. And these figures grow more burdensome every year. Default is common.

If a college graduate is weighed down with debt, he or she can’t buy an automobile, will postpone marriage, not even think about buying a starter home, and find it very difficult to borrow for a small business. Many who marry end up living in a parent’s home. So student debt has a ripple effect on the entire national economy.

Take a look at what some young people are borrowing for and be prepared to be horrified. Yes, there are some engineers, mathematicians, chemists, pre-med students, future lawyers, accountants, and others who are employable or soon will be after post-graduate study. But the number of graduates who sailed through college immersed in “soft” courses is already enormous, and it’s growing. After four years of college, no doubt with many hours consumed by partying and little real learning, many of these grads are now waiting on tables and filling other jobs that never required a college degree in the first place. But the professors who taught them aren’t hurting.

Senator Elizabeth Warren (D-Mass.) recently addressed the student debt problem by authoring legislation to lower the interest rate to at 3.86 percent, even allowing recent graduates to apply for the new rate. (She once earned upwards of $400,000 for a single year at Harvard where she taught only one class!) Democrats overwhelmingly backed her bill but Republicans blocked passage. Then, keeping up with threats to use his ever-ready pen, would-be-emperor Barack Obama signed an executive order expanding the Pay As You Earn program (PAYE) to make it easier for young people to dig out of the hole they created for themselves. If asked, neither the president nor Senator Warren could cite constitutional authorization for federal loans to students – at any interest level.

However, a proper non-government kind of help for students does come from some companies, foundations, and others. Teaming with Arizona State University, Starbucks just announced a remarkable plan to pay the costs of an online college education for any of its 135,000 workers. Each is required only to work a minimum of 20 hours per week and, once into the program, each can continue to participate even after leaving the famous coffee house’s employ. Unlike some corporate programs, all of which are surely appreciated by those who participate, the Starbucks plan doesn’t require workers to stay with the company or study only work-related courses.

While the Starbucks plan will definitely create happy employees, the plans offered by Democratic politicians are surely designed to increase voter loyalty. As Bob Adelmann quotes Obama in his most recent article, Obama Further Inflates Student Loan Bubble, “A higher education is the single best investment that you can make in yourselves and your future, and we’ve got to make sure that investment pays off….”, it is evident politicians have little difficulty finding ways to buy the votes of some with money taken from the pockets of others. The Starbucks way costs taxpayers nothing and, as usual, the politicians are eager to redistribute wealth. Karl Marx would be proud of them.

Borrowing Paves the Way Toward Servitude

Borrowing Paves the Way Toward Servitude
by JBS President John F. McManus

Chapter 22, Verse 7, of Holy Scripture’s Book of Proverbs tells us what our nation can expect because of heavy indebtedness and consequent borrowing. It says very bluntly, “… the borrower is servant to him that lendeth.”

We can’t be sure that any Russian official has read Holy Scripture. But it is certain that some Russians didn’t need the Good Book to figure out that a borrower puts himself in a subservient position.

In the wake of the Russian occupation of the Crimean Peninsula, officials in Washington issued stern warnings to the Russian government. One key threat stated by President Barack Obama informed Moscow that assets held by Russians in U.S. banks could be frozen if the takeover continued. His warning was supposed to scare Vladimir Putin and various Russian plutocrats into canceling the takeover. But Mr. Obama’s not only didn’t frighten any Russian official, it made some of them angry. The blustering out of Washington had a reverse effect that could imperil the U.S. far more than anything waved in front of Putin and his team. On March 17th, the U.S. President made good on his threat and ordered the freezing of some Russian assets. Russian officials reacted with laughter. Putin is placing his own sanctions on U.S. Senators.

Russian Presidential Adviser Sergei Glazyev and Russian President Vladimir Putin attend a 2013 conference: “Orthodox-Slavic Values: The Foundation of Ukraine’s Civilisational Choice” (photo by Kremlin President of Russia site, some rights reserved).

Sergei Glazyev is a top advisor to Putin. On March 4th, according to a report published by the Russian news agency Novosti – and reported in the U.S. by Barron’s – Glazyev showed very clearly his belief that considerable leverage in this confrontation is held by his country, not by the United States. With the blessing of Vladimir Putin, he thundered:

We hold a decent amount of Treasury bonds – more than $200 billion – and if the United States dares to freeze accounts of Russian businesses and citizens, we can no longer view America as a reliable partner. We will encourage everybody to dump U.S. Treasury bonds, get rid of dollars as an unreliable currency, and leave the U.S. market.

Japan and China each hold far more U.S. Treasury bonds than does Russia. Looking at the amounts realistically, Russia’s $200 billion is almost pocket change compared to what these two Asian governments possess. Should the U.S. offend either of them, or should they follow the course laid out by Glazyev, or should either or both simply decide to pull the plug on the dollar, one or the other could dump their holdings and cause the dollar to resemble the worthless Zimbabwean currency of only a few years ago. According to Glazyev, Japan and China may indeed be prodded by Russia to do so.

Right now, the admitted U.S. national debt stands at approximately $17.5 trillion dollars. Much of it has been “serviced” by foreign purchases of U.S. bonds. Another large portion has resulted from the Federal Reserve creation of dollars out of thin air, new dollars to cover domestic deficits and to bail out shaky banks both here and overseas. Yet, deficit spending continues and the sacrosanct “independence” of the Fed remains unaudited and uncontrolled.

U.S. leaders have placed our country’s neck in a noose. Instead of working to extricate America from its predicament, a merry march toward insolvency and loss of sovereignty continues as if there will always be a lender. Congress recently passed legislation to allow the national debt to rise and, while at it, members didn’t even place a ceiling on how high it could go. Blame for this outrage should be directed at Republican leaders and most Democrats who arranged also to keep government debt much less of an issue during the 2014 election cycle.

Will American awaken in time to keep our country free of servitude to its lenders? Only God Himself knows for sure, but we can all be certain that what was stated in His Book of Proverbs can’t be denied.

The White Flag Republicans: Is Surrender in Your Credo?

The White Flag Republicans
by JBS President John F. McManus

Only a few weeks ago, there was going to be a real fight over raising the debt ceiling. GOP leaders were poised to force President Obama’s hand. The U.S. government was running out of money again and, if not given a green light by Congress to borrow more, Uncle Sam would be unable to meet obligations – not only to Americans but to foreigners as well. Crisis loomed on the horizon if the debt ceiling weren’t raised!

Also, a new debt ceiling could have been set to occur before the November elections. It could have been created to show the public that Democrats running for office this Fall are members of the reckless spendthrift party, the party that is most responsible for piling up debt for today’s and tomorrow’s children. And that would be good for the Republicans, even good for the nation. All this would occur if the need for another raise in the debt ceiling before Election Day 2014 could be blamed on Democrats.

But it didn’t happen. When decisions had to be made, Republican leaders gave their opponents in Congress a blank check extending into 2015 – well past the date when the mid-term elections would be held. Credit GOP Senate leader Mitch McConnell of Kentucky and GOP House Speaker John Boehner of Ohio for caving in. They engineered a deal whereby increasing the debt ceiling could continue – without even a limit! – until early 2015. The November 2014 elections will be over by then and federal indebtedness will hardly be the issue it could have been.

As of March 5, 2014, the admitted National Debt stands at $17,449,362,830,163. That’s $17.5 trillion, and the figure does not even include huge unfunded obligations (Social Security, Medicare, etc.). The debt total for each person in America is $54,912. And the accumulated debt rises by $2.65 billion every single day.

Stopping this madness is imperative. A giant step toward needed sanity could have been taken by extending the allowable debt figure only so far, making any further increase occur prior to the 2014 elections, and beginning to cut back on spending. But McConnell and Boehner folded, 28 of the 230 House GOP members went along, Republicans in the Senate weren’t numerically strong enough to resist, and Congress produced so-called “clean” debt ceiling increase. The term “clean” meant there would be no real actual ceiling, and reckless spending could continue with no one shouldering obvious blame.

The golden opportunity Republicans had to increase their numbers in the House and take control of the Senate died. Subsequent cries for replacing both McConnell and Boehner have grown stronger. Many have decided that the McConnell-Boehner opposition to the suicidal course our nation has adopted amounts to no opposition whatsoever. Is surrender in your credo, too?

Not ours.