- GOP: Environmental rules keeping agents from accessing border
- John Kerry: Millions displaced by religious fighting in 2013
- Federal appeals court rules against Virginia’s gay marriage ban
- White House says Russia ‘losing’ war in Ukraine
- Hamas turns to North Korea for weapons deal, Iran for money
- Syrian casualties surge as jihadis consolidate
- U.N. rights chief: Flight MH17 downing possible war crime
- Attack on park in Gaza war kills 10, mostly children
- Calif. protesters to block Israel-owned ships at Port of Oakland
- Obama to give Africa $38M, but tells young leaders: Stop ‘making excuses’ for economy
ORTEL: As the world convulses, America’s greatest danger lies at home from mounting debt
Question of the Day
Mired in the first modern depression, President Franklin D. Roosevelt opened his inaugural address in 1933 by saying: “This is pre-eminently the time to speak the truth, the whole truth, frankly and boldly.”
What a refreshing concept — that elected officials might tell the truth to the people.
With regard to today’s economy, the Obama administration still refuses to admit that five years of reckless deficit spending and artificially low interest rates now threaten America and the civilized world.
The existential threat of U.S. debt
Since 1991, all sectors in the U.S. economy have become too comfortable in borrowing. Compared to most other nations, America has seemed a safe place, and most of us have enjoyed the benefits of relentlessly declining interest rates.
The debts we have piled up since 1991 are staggering in size.
According to data from the Federal Reserve System, the U.S.’ total debt quadrupled from $14.1 trillion at year-end 1991 to $56.1 trillion at year-end 2013.
The federal government’s debt was only a fraction of the problem — rising from $2.8 trillion in 1991 to $12.4 trillion in 2013. Debts owed by financial institutions, businesses, households and local governments climbed from $11.3 trillion to $ 43.7 trillion.
The U.S. never before has confronted a reality in which the rest of the world has forced us to reduce our debt. This could change — rapidly — as geopolitical conflicts damage America’s world standing and shake investors’ confidence that our currency will hold its value.
Lost amid the flow of news last week were ominous developments in U.S. government debt markets.
In past crises, investors abandoned other currencies and fled to U.S. dollar-denominated debts, driving down the interest rates our federal government pays. Last week, interest rates on U.S. government debts rose — markedly so for many maturities.
America’s demographic destiny
In other bad news last week, we learned that the U.S.’ debt burden is a weighty yoke on a population that is less able to work, earn incomes, save money and repay debt.
According to Labor Department statistics last week, 84.2 million persons out of 104.8 million aged 25 to 49 worked during 2007, the year before the global financial crisis hit with full force. (Workers in that age group — not those just starting out or nearing retirement — are best able to generate excess cash.)
About the Author
Charles Ortel became a lapsed member of the silent majority in August 2007 when he began alerting the public to dangers posed by structural changes in the global economy. Since then, Charles has appeared in the print, radio and television media with increasing frequency. Brass Tacks will attempt to offer non-partisan perspective on factors contributing to the unresolved, burgeoning crisis ...
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