Our massive debt crisis poses greatest threat to our freedom | Eurasia Diary - ednews.net

16 December,


Our massive debt crisis poses greatest threat to our freedom

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The greatest threat to the freedom of Americans and the pursuit of happiness is not illegal immigration. While I strongly believe that we need to reform our immigration system, the greatest threat to the nation is our excessive public spending habits. A recent Treasury Department report predicted that the federal government would need to borrow $769 billion in the second half of this year, making it the highest the government has taken on debt since the financial crisis a decade ago in 2008.
 
Thanks to the widening budget gap, a result of the $1.5 trillion in tax cuts along with a $300 billion spending increase, the Treasury Department needs to boost the sale of bills, notes, and bonds. President Trump is counting on the success of the economy, which expanded at 4.1. percent in the last quarter, the strongest growth since the third quarter of 2014 to boost government revenue and shrink the budget deficit.
 
However, it is unlikely that the economy will meet the White House goal of sustained 3 percent growth. With the expectation of another recession based on the yield curve, the bond market is signaling potential trouble ahead. As the Treasury Department issues more government bonds and corporate debt increases, this could ultimately become the perfect storm when you add in the ongoing trade wars.
 
Most Americans have to budget their spending habits monthly, weekly, or in some cases, even daily to make sure they have enough to get by. When things become tight, people are forced to make cuts anywhere and everywhere they can just to get by. However, the government appears entirely incapable of or even remotely interested in adopting this true and tried practice. Instead, Washington spends excessively and winds up relying on China, our biggest creditor, to keep us afloat. While for the foreseeable future our two destinies are linked, Chinese expansion into Africa, South America and the Middle East may eventually change that.
 
Instead of making cuts and balancing the budget, spending has increased. The ratio of debt to GDP averaged 61.7 percent from 1940 until 2017, when the government recorded debt equivalent to 105.4 percent of the GDP. In 1946, the ratio of debt to GDP reached 118.9 percent, yet the government was still able to reduce spending, pay off debt, and run a budget surplus. Unfortunately, that is no longer realistic due to the large deficit gap, overgrown bond market, and increasing corporate debt.
 
The strength of the U.S. economy today shows in the data, but the continued increase of the national debt is not sustainable in the long run. The “perpetual debt” of the government, as Thomas Jefferson called it, has become a dire crisis that Republicans, who are supposed to be stewards of fiscal responsibility, must address more seriously.
 
In a letter to George Washington in 1792, Jefferson wrote, “No man is more ardently intent to see the public debt soon and sacredly paid off than I am.” He stressed that public debt was not only demoralizing to the nation, but argued that each generation should be limited to accumulating only the debt that it could pay off. That theory never held and, as a result, the United States in many ways has become a debtor nation.
 
Republicans have an obligation, both morally and ethically to our future generations, to rein in government spending, while millions of households across America make cuts where necessary. It is unfair for everyday people to struggle by working hard and pulling themselves up by their bootstraps only to have those very boots removed because Republicans fail to live up to the core party principle of fiscal responsibility.
 
Individuals cannot be free or maintain any sense of autonomy if the country is mired in debt. The middle class will never be what it once was if the government has unpaid financial obligations. If the politicians in Washington really care about the everyday man and woman in America, they need to do what is best for those on Main Street.

The Hill

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