Passing Our Debts To Our Children (EP.03)

In Debt, Financial, Podcast, Responsibility by Will Luden10 Comments

Our national debt of $21 Trillion–and rising rapidly–will be paid by our kids and grandkids. The much talked about 1% and the corporations will not be the ones picking up the tab; our heirs will get the check. Quick math shows that the about owed by each of one us, man, woman and child, is $60K. A family of 5 currently owes $300K. And we are the ones creating this debt.

Governments, corporations and, yes, even the 1% are made up of nothing but individuals. Individuals are the only entities who can create wealth for themselves and corporations; clearly they are the only ones who can create taxable income. And it has to follow that if individuals are the taxpayers, individuals owe the money.

Right now, we are spending money we don’t have–adding constantly to the national debt–obviously living better lives than we can afford. Our kids and their kids will be stuck leading lives that are less that they would have been able to afford because they are paying off past debts–our debts. “Fly now, pay later” is becoming we fly now, they pay later.

Is that at all reasonable and responsible? Is that what we want? Because it is what we are doing.

Politicians love to spend tax money to look like good guys and buy votes. That part of the fault lies with them. The greater fault lies with us; we vote for them over and over, knowing exactly what they are going to so. We know the debt will keep rising, buying our current generations things we can’t afford–passing a mounting and devastating debt burden onto future generations. Our kids. And their kids.

We can fix this. We must fix this.

Will Luden, writing from my home office at 7,200 feet in Colorado Springs.

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Will Luden

As an author, speaker, public company board chair, family man, a man with many friends (and friends-to-be), citizen and a child of God, I am driven to contribute. One way to for me to contribute is to start thought-provoking discussions.My overall objective is to stimulate “Passionate, Relentless, Reasoning.” My specific goals include getting people to act (only) after Reasoning.
Will Luden
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  1. “We can fix this” and “we must fix this.” Will, you continue to describe so well our problems of today – including “this” one. But, while “we must fix this” let’s ask or tell “how we can fix “this!” I would think that mailing today’s comments to any of our representatives – state or national – would just fall on deaf ears since they should know “this” by now. And, should they request reading your comments to their fellows during session, it would probably fall on deaf ears for the same reason. So, what if someone like the President, Vice President or Stephan Curry (Rick Barry?) could speak publically before the House to remind them of our problem and either tell or order them to come up with how to fix it and start action by a prescribed time?

    Should the above come to pass – and I’m sure you know his many but believe the following quotes from Winston Churchill bare thought:

    “To each there comes in their lifetime a special moment when they are figuratively tapped on the shoulder and offered the chance to do a very special thing. What a tragedy if that moment finds them unprepared or unqualified for that which could have been their finest hour.”

    “However beautiful the strategy, you should occasionally look at the results.”

    “One man with conviction will overwhelm a hundred who have only opinions.”

    “A good speech should be like a woman’s skirt: long enough to cover the subject and short enough to create interest.”

    “There is nothing government can give you that it hasn’t taken from you in the first place.”

    “You don’t make the poor richer by making the rich poorer.”

    “We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

    “Life can either be accepted or changed. If it is not accepted, it must be changed. If it cannot be changed, then it must be accepted.”

    “An appeaser is one who feeds a crocodile, hoping it will eat him last.”

    And, finally – “A nation that forgets its past has no future.”

    Hope you get my point(s) – this is such a stupid place we’re in just now.

    Best/ Ken

        1. Author

          Sorry, Ken, I was complimenting you by saying that one day you should write, perhaps, a “guest” piece for this blog site…:). Cheers, Will

          1. Well, I’m listening to your bodcast right now and – although you just have a great, convincing voice I would love to see you talking on a video. Or, is stupid me still missing something, Cuz?

          2. Author

            Ken, you are not missing anything; very perceptive, in fact. I do plan on adding videos at some point; however, I do have a face made for radio…:).

  2. Your analysis is correct, as far as it goes. Here’s a well-sourced dynamic picture of the debt, based on official US Government sources:

    The more sobering reality is at the bottom of the page: US Unfunded Liabilities (GAAP). Just under $115 Trillion. Divide by the current US population and you get $348K.

    What’s the big deal:
    – This is the Present Value (GAAP) — ie all future inflation is already accounted for…
    – … total of federal (NOT states) commitments already made by law, for present and future benefits… (“Liabilities”)
    – … for which there is no known plan or legislation to cover the cost (“Unfunded”)

    In other words, to cover our *existing* legislated commitments, either:

    A) Every man woman and child in the US would need $348K of assets earning interest or appreciating in some way. Today.
    B) We need to find a way to generate massive new wealth far beyond what we’ve already accomplished.
    C) We need to reduce those commitments.

    To put this in perspective, I did an interesting calculation. Sorry, I don’t remember my source for the first step but it can’t be too hard to obtain:

    * Find the income and assets/wealth of the US Population by income level
    * Take 100% of all income and assets of the top 20%, approximately all households earning more than $100k
    * That would not be enough to cover the existing unfunded liability.

    Why mess around with the one percent, or with making them pay their “fair share?”
    As a rational though experiment, let’s just confiscate ALL of it! 😀

    Oops. That’s not enough.

    – …and

    1. Author

      Pete, well written. And the very federal government that forces private businesses to show liabilities like leases and pensions on their financial, does not do so itself.

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