Captain Rick: If the U.S. Federal Government was in control of your household budget, you would be in serious financial trouble! I have prepared this simple comparison to show you why:
Annual Financial Statement of the United States of America:
U.S. Tax revenue: $ 2,170,000,000,000
Federal budget: $ 3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $ 16,571,000,000,000
Interest on the National debt: $ 222,800,000,000
Recent budget cuts: $ 38,500,000,000
Let’s now remove 8 zeros and pretend it’s an annual household budget:
Annual family income: $ 21,700
Money the family spent: $ 38,200
New debt on the credit card: $ 16,500
Outstanding balance on the credit card: $ 165,710
Interest on the credit card: $ 2,228
Total budget cuts so far: $ 385
What would happen if the bank froze your credit card, preventing more debt?
Can you imagine how bad your budget would be if you were spending $16,500 more each year than you received in income? The interest on your credit card balance would be $2,228 this year and would be added to your massive balance of $165,710. Each year your debt is growing larger at a rapid rate.
Now, suppose your bank lost faith in your ability to pay your balance. Its easy to guess that your bank will freeze your credit card, allowing no further debt. How will you pay the $16,500 in expenditures that were beyond your budget? How will you make your loan payments, or even pay the $2,228 in interest on your credit balance? You would probably be left with one choice…declare bankruptcy. Luckily, you would have the U.S. Federal Government (Uncle Sam) to excuse your debt and allow you a new financial start.
What would happen if the bank froze Uncle Sam’s credit card, preventing more debt?
The situation with Uncle Sam’s budget is identical to yours, only exponentially larger. However, there is a large difference in who controls the credit. Uncle Sam’s debt is not held by a bank. It is held by a large number of investors, investing firms and countries all around the world. Japan and China hold a large portion of America’s debt. It is highly unlikely that all of the creditors would freeze Uncle Sam’s credit all at once. But, supposing one day China or Japan lost faith in Uncle Sam’s ability to repay their investment…or even the interest on it? Its easy to guess that they would stop further investments in the U.S. federal government.
When a large enough source of new investment is stopped, how will Uncle Sam finance America’s programs which count on $1.65 trillion of borrowed money each year? How will it repay its debt to investors…or even pay the $223 billion in interest on the balance? Unfortunately bankruptcy is not an alternative for Uncle Sam. There is no bigger entity to bail it out or give it a fresh financial start. Its only remaining option will be to reduce payments to various programs so that it stays within the limits of new debt which can be sourced. It could also mean that the U.S. would have to default on its debt owed. This in return would most certainly stop most, if not all of America’s creditors from making further investments. This would worsen the situation and virtually force America to live within its budget, drastically slashing its programs by $1.65 trillion per year. Programs like Social Security, Medicare, Medicaid and Defense would most certainly be significantly affected, as they are the largest budget items. Such massive cuts would most certainly cast America into a deep recession, probably far worse than the Great Recession a few years ago.
Captain Rick’s Solution Scenarios
Maintain Current Course of Deficit Spending with only small, token reductions:
This is not an acceptable solution. It will lead to failure of America’s financial system within a few years. The cost of America’s entitlement programs like Social Security, Medicare and Medicaid are growing in size at an astronomical rate. In a very short time these three programs will consume 100% of all Federal Tax Income, leaving nothing to support the entire balance of the government without deficit spending. With this course, its not a matter of IF the world’s creditors will cut off America’s credit…but WHEN.
Balance the U.S. budget within 10 years:
This is the course America must take if it is to survive. The Fiscal Cliff had a goal of cutting half of the deficit spending 10 years. That was a good start, but congress cant even achieve it. Congress continues kicking America’s debt can down the road, agreeing on allowing only token spending reductions and tax increases. America must do better…soon!
It will require major spending reductions affecting all programs and tax revenue increases across the board. It will also require significant entitlement and grant program reform. The days of Uncle Sam handing out money with a blindfold on must end soon.
Does America have the ‘guts’ to make these sacrifices? Time will tell…but time is running out quickly. I hope for our children’s sake that America gets its act together soon or our kids will likely find themselves living one day in a third world country.
I welcome your comment and hope you will share this with your friends via one of the means I have provided. Together, our voice can make a difference.
More Info:
Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/
U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/
SDI: Defense against a Lunatic in N. Korea ? … Does Trump have it backwards ?
Posted: October 13, 2017 in America, Guest Commentary, North Korea, President TrumpTags: Antimissile Defense, ATRIDIM NEWS JOURNAL, Captain Rick, China, Cold War, North Korea, Nuclear, President Bush, President Obama, Russia, SDI, Strategic Defense Initiative, Thomas C. Patterson
Captain Rick: I am pleased to announce that Thomas C. Patterson, past Arizona state legislator and guest journalist on Atridim News Journal since 2013, will present a series of reports on subjects of great importance to America and our world. The first in the series is about the Strategic Defense Initiative and the explosive situation in North Korea.
I asked Tom why he is presenting his voice on ANJ. His reply: “I write it because I don’t want to be part of the generation that let liberty die out on our watch or at least I want to know that I did what I could to prevent it. I would like some of the good things about America to be there for my grand-children. I always love it when you carry my stuff. Let me know if I can be of further help in your efforts to promote the good and the true.”
ATRIDIM NEWS JOURNAL
Guest Commentary
by
Thomas C. Patterson
ABOUT: Thomas C. Patterson is a graduate of Yale University and the University of Nebraska. He was elected to the Arizona State Senate in 1989, serving as minority leader from 1991 to 1992 and majority leader from 1993 to 1996. Patterson was the author of legislation creating Arizona’s charter school system and welfare reform program. Until 1998, he was a practicing physician and president of Emergency Physicians, Inc.. Patterson also served as president of the Arizona chapter of the American College of Emergency Physicians. In 2000 he became chairman of the Goldwater Institute. In 2013 he became a guest journalist on Atridim News Journal. Thomas is a resident of Chandler, Arizona.
SDI: Defense against a Lunatic in N. Korea ? …
Does Trump have it backwards ?
Americans are finally finding out what it takes for the Left to support antimissile defense in a nuclearized world. The answer: an immediate existential danger from a crazed dictator with nothing to lose from terrorizing us.
Now we’re faced with a lunatic who has the capability of obliterating parts of our mainland, an achievement which has made him a player on the world stage. The current crisis has been predictable for a long time. As nuclear capability gradually became within the technical reach of rogue states and terrorists everywhere, our leaders studiously ignored the signs of danger.
The first antimissile defense was the Strategic Defense Initiative, conceptualized by President Reagan and ridiculed as "Star Wars" by his political adversaries. Even when it proved effective in halting the end of the Cold War, opponents still followed a strategy of repeatedly under funding and undermining the technology, then complaining about the lack of progress achieved.
Barack Obama was a prominent opposition leader, helping to stall the program and then as president pronouncing it “unproven”. He canceled previously negotiated antimissile installations in Poland and Czech Republic. Later he was caught on a hot mic telling a Soviet official that he would later be "flexible with Vladimir" with respect to missile defense.
We are now in a dangerously vulnerable situation. Experts say it would take up to three years to implement a system that would fully protect us from North Korea and eliminate China’s first-strike capability.
Still, our inability to protect ourselves wouldn’t be such a big deal now if not for the weak diplomatic efforts that failed to contain the North Korean menace. After North Korea first begin developing nuclear capability, President Clinton in 1994 struck a deal in which North Korea agreed to come clean and pursue only nonmilitary uses of nuclear power.
But the Commies negotiated harder and smarter than we did, preserving multiple loopholes and avoiding effective compliance checks. The treaty probably did more to facilitate North Korea’s missile program than to hobble it.
Unfortunately, George W. Bush did nothing to end the dithering and confront reality. Obama, for his part, raised appeasement to an art form around the world. He complained about wasting money "making some version of this Cold War daydream into reality" as one pundit put it. In the end, Obama finally had a change of heart when his truculence had put our country in obvious danger and only then authorized anti-missile bases in the West.
The lessons of history are clear. Diplomacy only succeeds when practiced from a position of strength. Appeasement doesn’t stop aggressors. When tyrants show you who they are, believe them. Unfortunately, our leaders have kicked the can down the road until there’s no more road, as Charles Krauthammer said.
Now that our mortal enemies have well-developed nuclear capabilities, our options are limited. Israeli forces in 1981 attacked the Iranian nuclear base Dosirak and were able to inflict telling damage but most observers agree that approach today would produce unacceptable consequences.
Russia and especially China, North Korea’s main patron and trading partner, should both be urged in the strongest terms to help convince North Korea to stand down. The hard truth is that a nuclear North Korea, hostile to the US, is in the strategic interests of both, so it’s unlikely we can win them over.
Teddy Roosevelt’s foreign-policy advice was to "speak softly and carry a big stick". President Trump seems to have it backwards, issuing bellicose threats, like he has so often, without seeming to realize that he must be willing and able to carry out the threats for them to have effect.
That leaves missile defense, the best of the bad options out there. We need to bear down and pour all the resources we can into this national emergency. Fortunately, missile-defense doesn’t have to be perfect to be effective as we found in the Cold War. Just the credible prospect of an anti-missile strike degrades the value of the enemy’s nuclear arsenal and greatly reduces the possibility of a first strike.
But we never would have come to this perilous point if our leaders had put America’s security interests above politics.
Tom’s previous reports in ANJ Guest Commentary