America's Debt load dangerous from Jan 09

I just found out my wife and I owe almost $70,000. My mother, father, brother and sister owe $140,000. I have two daughters, two sons-in-law, and two granddaughters. They owe $210,000. Together my immediate family owes almost half a million dollars!

It’s not just my family, either. Every family living in my Northeast Georgia county shares this financial burden. If my math is correct residents of Habersham County owe $1,470,000,000.

Yep - that’s right! Habersham County’s share of the NATIONAL DEBIT is almost 1½ BILLION dollars! That, my friends, is a LOT of money. It would build 150 new county courthouses or would run our county government for the next 75 years without a single dollar of tax income.

The total amount of the national debt? According to the Congressional Budget Office, as of early February 2009, our Federal Government now owes $10,633,508,902,000.00. That is over 10 ½ trillion dollars.

I would like to say that we are starting to pay on this tremendous debt, but we are not. In fact, almost every time you hear congress passes a new bill and it is signed into law, you need to know it is adding to the amount you and I as American citizens owe. If the new trillion dollar stimulus passes, it will add over $3400 per person to the national debt.

I have a few questions. From whom are we borrowing this money? What is the interest rate? How much are the payments?

Apparently, we owe almost half to the Federal Reserve, but what is disturbing is we owe well over one third of our debt to foreign governments. Almost $700 billion, over 22%, is owed to Mainland China. We owe Japan almost $600 billion. We are also indebted to England, Russia, and more than 25 other countries.

I think the interest rate varies, but the so called “stimulus package” is estimated to be $825 billion. When you add interest it will come to $1.1 trillion. That is $275 billion in interest.

The federal government doesn’t make monthly payments on the debt - we can’t afford to. We basically just pay the interest and pay off old bonds or notes (loans) with new ones.

This madness has got to stop! While it is true, the United States has always carried debt, and some economists would argue that an acceptable amount of debt is a good thing; this amount of staggering indebtedness cannot be good. I have even more concern when you consider whom we are borrowing it from.

People have been complaining about the national debt for most of my life. It is nothing new. In fact, I understand that it was even a larger part of the GNP during WWII than it is now, but times are different now. Most of the debt in the 30's & 40's was to fund the war. Today most of our deficit is to fund entitlement programs such as Social Security, Medicare, and Medicaid.

The non-partisan Congressional Budget Office estimates that if current law is not changed, sometime between 2030 and 2040 the amount spent on entitlements will exceed the nations income. That means that every penny we spend for discretionary expenses, such as defense, infrastructure, education and etc., will have to be borrowed.

According to Dr. Larry Kotlikoff, noted economist and professor at Boston University, unless something is done soon, the United States could face bankruptcy by 2060.

Our only hope for getting out of this mess is the entrepreneurial spirit of the American people. Borrowing money, adding to the national debt and increasing taxes will not do it. It was the American entrepreneurial spirit that got the economy going in the early 20th Century and again after WWII. We started paying on the national debt again during the 90's largely because of the thousands of Americans starting new businesses thanks to the “dot com” phenomenon. The more people earn, the more taxes they pay. People like Bill Gates and Paul Allen of Microsoft; Larry Page and Sergey Brin at Google; Pierre Omidyar at E-Bay and other ambitious Americans have added millions of jobs that didn’t exist 30 years ago. What started as SMALL business in the 80's and 90's is now BIG business.

Early in January then President-Elect Obama proclaimed that only government could lift the country out of our current economic crisis. I disagree. I believe only small business can bring back prosperity.

I’m not sure what the next entrepreneurial opportunity will be. Possibly in the 21st Century a new energy source, or marketable transportation alternative will do what cars and refrigerators did for the early 20th Century or what computers and high tech did for the late 20th Century. Whatever it is it better come soon.

I beg President Obama and Congress to stop spending on anything that does not DIRECTLY lead to jobs and stimulating business. My granddaughters, age 4 and 2, simply can’t afford it!


Bobby Watson
277 Charlie Batson Rd
Demorest, GA 30535
discoverytours@windstream.net