America's Growing Debt Crisis
A commentary by Melvin Rhodes
Good News writer, and regional pastor, Ghana
The amount of U.S. debt, federal and state combined, that has
been placed by government legislation on the shoulders of every
U.S. taxpayer is staggering.
When all of America's long term financial obligations
are considered, the recent billions of dollars that have been added
to that debt by the current Wall Street financial crisis are merely
the tip of the iceberg.
Only by dividing the total of that government debt into each citizen's
share can we even begin to comprehend the seriousness of the problem
for every U.S. man, woman and child.
Earlier this year USA Today writer Dennis Cauchon wrote: "Taxpayers
are on the hook for a record $57.3 trillion in federal liabilities
to cover the lifetime benefits of everyone eligible for Medicare,
Social Security and other government programs, a USA TODAY analysis
found. That's nearly $500,000 per household. When obligations
of state and local governments are added, the total rises to $61.7
trillion, or $531,472 per household. That is more than four
times what Americans owe in personal debt such as mortgages.
"The $2.5 trillion [growth] in federal liabilities [in 2007] dwarfs
the $162 billion the government officially announced as last year's deficit,
down from $248 billion a year earlier. 'We're running deficits in
the trillions of dollars, not the hundreds of billions of dollars we're being
told,' says Sheila Weinberg, chief executive of the
Institute for Truth in Accounting of Chicago.
"The reason for the discrepancy: Accounting standards require corporations
and state governments to count new financial obligations, even if the payments
will be made later.
"The federal government doesn't follow that rule. Instead of counting
lifetime benefits for programs such as Social Security, the government counts
the cost of benefits for the current year. The deteriorating condition of
these programs doesn't show up in the government's bottom line, but the information
is released elsewhere—in Medicare's annual report, for example" (usatoday.com,
May 18, 2008, emphasis added throughout).
Inflation also compounds the problem.
A Wall Street Journal news alert on June 3, 2008 stated: "Federal Reserve
Chairman Ben Bernanke on Tuesday put the U.S. dollar squarely on the Fed's
radar screen, saying its slide against other currencies has led to an 'unwelcome' rise
in U.S. inflation and may be a factor in inflation expectations."
The unintended consequence of low interest rates has been that
they contributed not only to the dollar's slide against other
currencies in the current financial crises on Wall Street but they
also fueled global inflation, especially in oil and food prices.
Higher costs have led to increased debt.
This accumulating debt problem is not without parallel in history.
At the end of World War II financially devastated Britain turned
its back on global responsibilities and started dismantling its
empire. The world's greatest nation prior to World War II,
Britain saw her position of preeminence pass to the United States.
Not only was Britain tired of endless war, her people also wanted
free medical care and a more equal distribution of wealth.
This is comparable to what the United States is facing today. The
twenty seven nations comprising the European Union already rival
the United States in economic power. The EU's currency is
used by more people than the American dollar and is arguably more
sought after the world over.
Interestingly, the European Central Bank's purpose differs
from that of the U.S. Federal Reserve's policy in recent times.
The role of the ECB is to control inflation, which means currency
must be kept strong, thereby limiting borrowing.
America's Federal Reserve since 1978 has had the responsibility
of ensuring continuing growth and full employment, a recipe for
over spending and higher rates of inflation. The United States is
now paying the price for continuous overspending.
History indicates that positive economic change nearly always precedes
the development and exercise of great political and military power.
Europe today is in position to begin exerting such power in almost
all spheres of influence. As U.S. economic dominance weakens, the
EU will be there to fill the gaps. And Bible prophecy indicates
that is just what will happen—though those prophecies do not
reveal precisely when that will occur.
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