Stan Geiger

Headed for the Wall

I caught a blurb on a national newscast the other day that said the federal government has borrowed $431 billion in the first four months of this fiscal year. We are running at a record pace.

I saw a journalist on one of the pundit shows make reference to America as we emerged from WWII. She noted that if predictions come true and we push the national debt to 100 percent of GDP, it will be the first time since the big war ended.

After a decade of borrowing in an attempt to address the Great Depression plus WWII spending, sure, our country was up to its butt in debt. We survived. Assuming we can do it again ignores the fact that we live in a much different environment today.

Social Security was around post WWII. But the ratio of taxpayers to benefit recipients was huge. Not so today. Last I heard, the ratio sits at 3-1. The ratio is expected to drop to 2-1 in the near future.

Medicare and Medicaid didn't exist back in the day.

Our nation's infrastructure was much smaller in 1946. Nowadays, it is enormous---and rotting.

In 1946, we were the last one standing, if you will. Germany, Japan, Britain and France were bombed into oblivion. We escaped untouched. The communist Soviet Union took the heaviest casualties of the war. India and China were of no concern. Our nation, in short, faced a bright future.

Things are much different today. We have 78 million Baby Boomers entering entitlement age. As noted, we are faced with massive infrastructure challenges. Asia, the European Union, the Russian Federation and, for that matter, Latin America, stand as challengers to our economic supremacy. We aren't looking up from here; we're looking down. We cannot afford to rack up the debt we are racking up, period.

I can't tell you when, but I can tell you it will happen---barring changes now. A day will come when the Treasury spits out $100 billion in bright shiny securities and there will be no buyers.

So what happens when Uncle Sam has $100 billion in obligations to meet in a given month but there is no money to back the checks?

Chaos. That's what happens.

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