Exploding debt – why should you care?

The national debt has reached an astonishing $33 Trillion. Yeah, what else is new?

You’ve probably been hearing about the national debt all your life. Yes, it’s a problem. There doesn’t seem to be any solution. Life goes on. Why should you care now?

Well, for one, budget negotiations are going on right now in Washington. It’s another high-stakes horse trading game to avoid another government shut down, which may or may not affect your travel plans, your paycheck if you’re military or a government employee, or even your drinking water…

They are deciding right now how much more money to add to the crippling debt. In other words, how much more serious to make these problems:

1. Economic Stability: Excessive government debt can lead to economic instability. When governments borrow too much, they may struggle to meet their debt obligations, potentially leading to defaults or the need for more significant borrowing. These events can trigger financial crises, which can have severe consequences for individuals, including job losses, reduced economic growth, and financial market turmoil.
2. Taxpayer Burden: Government debt is ultimately paid for by taxpayers. When governments borrow, they must repay the borrowed funds with interest. This often requires increased taxes, reduced public services, or both. High levels of government debt can lead to higher taxes, leaving individuals with less disposable income.
3. Reduced Public Services: Governments with high levels of debt may be forced to cut back on essential public services, such as healthcare, education, and infrastructure development, to allocate more resources to debt servicing. This can negatively impact the quality of life for citizens.
4. Interest Costs: A significant portion of government spending goes toward paying interest on the debt. The higher the debt levels, the more resources are diverted from other essential government functions. This limits the government’s ability to invest in areas like education, healthcare, and social programs.
5. Crowding Out Private Investment: When governments borrow heavily, they may compete with private borrowers for available funds in the credit market. This can lead to higher interest rates for businesses and individuals, making it more expensive to finance investments and projects, potentially stifling economic growth.
6. Inflation Risk: If governments resort to excessive borrowing and central banks respond by printing more money to cover the debt, it can lead to inflation. Inflation erodes the purchasing power of money and can negatively affect the savings and financial security of individuals.
7. Inter-generational Equity: High government debt levels can place a burden on future generations. When governments accumulate debt, they are essentially passing on the cost of today’s spending to future taxpayers, potentially limiting their economic opportunities and well-being.
8. Creditworthiness: A country’s level of debt can impact its creditworthiness and access to credit. If a nation’s debt becomes too high and its credit rating is downgraded, it may face difficulties in borrowing at favorable terms in the international financial markets.
9. Political Decision-Making: High levels of government debt can influence political decision-making. Policymakers may prioritize short-term political gains over long-term fiscal responsibility, leading to unsustainable policies and a focus on populist measures rather than prudent economic management.

If you don’t think these issues have really affected you, think about life 20 years ago, or 30 years ago, even 50 years ago. How often did people worry about Social Security defaulting when they were going to retire? How reliable were government services compared to today? Did we worry about our credit-worthiness and standing in the world? What were prices like at the grocery store compared to wages? Now think about 20, 30, or 50 years from now when your kids and grandkids are facing life challenges. What kind of world are they inheriting if this continues?

But critically, what can you DO about it? There is no point in stressing out about things you have no control over, right? But there are actually a couple things you COULD do.

1 – You could weigh-in with your congressman and tell them what you think. You know how much they love to hear from you. If you dial the main U.S. House switchboard number, 202-224-3121, they can connect you to the right office based on your address even if you don’t know who your congressman is. Or you can look them up here. That is one thing you can DO to add your voice to the conversation.

True, you are but one voice. One in 339 million.

2 – You can also educate yourself, spot the trend and anticipate what is coming. You can prepare yourself and your finances accordingly. We believe precious metals are an important part of that preparation. We believe that as the dollar sinks under the weight of debt and inflation, precious metals should be more stable and preserve your wealth. Historically, that has been the case and a well-diversified portfolio should reflect this. Is your portfolio balanced in defense of government debt? Call us today to secure your future. We have metals in stock and account executives standing by ready to take your call.