America is rich and powerful because we can borrow. Will this debt build a stronger America?
Summary: This was originally intended as a follow-up to The Titanic’s lessons for us about the coming economic crisis. But as so often the case on the FM website, it changed while being written. Instead of a discussion about the importance of choosing good leaders, it asks what we think we’re doing — thoughtlessly borrowing and spending trillions?
The Federal government — us, America — have borrowed $5.9 trillion dollars since the recession began. What do we have to show for it? With such a vast sum we could have rebuilt much of our infrastructure, putting tens of thousands of unemployed people (especially in the construction-related industries) back to work — and laid the physical foundation for an America that can compete in the 21st century (instead of the decaying, often 2nd world infrastructure we have now).
Equally important, infrastructure can generate economic returns on the investment — sometimes direct, sometimes indirect — that can help pay back the debt incurred. Building valuable facilities while costs are low, borrowing at low rates and putting the unemployed to work.
So what have we done with the money instead of this? Much of the borrowed money went to offset lost tax revenue for the Federal, State, and local governments. Much went to benefits for the unemployed, such as food stamps and Medicaid.
During this period we spend roughly a trillion dollars per year on military, intelligence, and homeland security (beyond conventional law enforcement). Lost in delusions of omnipotence (without our no-limit national VISA card), to fight a rag-tag band of jihadists we invaded and occupied two nations, deployed our finest troops to fight in other nations, and bomb others.
In addition, we’ve built massive conventional forces — with no clear opponents — and invested incredible sums developing even higher-tech weapons to fight unknown foes in the future (for details see this article, with photos).
Our leaders did not do this over our objections. There were no protests. No letter-writing campaigns. Nothing. Just the wealth of a great nation poured down the toilet.
This is madness. This is America.
How can we recover our former wisdom?
For more information
- Everything you need to know about government stimulus programs (read this – it’s about your money), 30 January 2009
- Government economic stimulus is financial heroin, 28 December 2009
- Our government’s finances are broken. How do we compare with our peers?, 8 April 2010
- A status report about the US economy (we party so hard we cannot hear the alarms ringing), 27 March 2012
- About America’s economic recovery: the good news and the bad, 1 May 2012
- Capitalism Lost: America goes broke because we forgot how to be capitalists, 24 May 2012