Tax Month is over, now we can go back to talking about debt.
Last week I got an
email from the Northborough Tea Party with a 20-minute video from
self-help guru Tony Robbins. I didn't know who he was, which
probably explains a lot about my self.
I thought, they want me
to spend 20 minutes watching a video? But then I remembered I'd just
spent three hours catching up with "The Good Wife" on
Comcast-on-Demand, because in real time I watch AMC's "The Killing"
every Sunday night instead. It's not as if my weekends are always
spent doing something useful.
So I watched the video.
It was riveting. The title of Robbins' presentation, which is on a
Ron Paul website, is "The
National Debt & Federal Budget Deconstructed."
Beginning with the
$15.4-trillion national debt (or $117 trillion counting unfunded
liabilities), he explains what "a trillion" is in seconds. A million
seconds is 12 days. A billion seconds is 32 years. A trillion
seconds is 32,000 years ago, when we were just evolving as human
beings.
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One
Million Dollars in $100 bills
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2012
U.S. Debt Ceiling
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U.S.
Unfunded Liabilities
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The 2012 federal budget
is $3.79 trillion. That's $10.4 billion a day, of which we borrow 40
cents on the dollar.
States have debt, too,
though they are required to balance their annual budgets. However,
according to a 2011 Associated Press survey, "The 50 state
governments owe more than $1 trillion in unfunded pension
contributions and health care obligations to retired public
employees." Yikes; in seconds, that's 32,000 years!
An April 27 Wall Street
Journal
piece by Steven Malanga notes the debt of Illinois is $3,399 per
person in accumulated obligations. Last year, Illinois "imposed $7
billion in new taxes on residents and business, pledging to use the
money to eliminate its deficit and pay down a backlog of unpaid
bills. But more than a year later, the state is in worse fiscal
shape, with its total deficit expected to increase to $5 billion
from $4.6 bil
lion." Guess that
tax-hike solution didn't work in President Obama's home state. Now
what?
Last year, my home
state's Harrisburg became the first state capital to file for
bankruptcy. Then the Pennsylvania General Assembly amended the
state's fiscal code to block third-class distressed cities from
filing for bankruptcy protection for a year. Last week Harrisburg
challenged the courts' upholding of that blocking. If it loses, what
then?
Despite all this, I've
begun questioning my own attitude toward debt (i.e., horror of). My
parents taught me to borrow only for necessities I couldn't save
for, like a home, and even then borrow only what I could reasonably
expect to pay back.
I've spent my entire
life avoiding debt, starting with dropping out of college when I ran
out of money. Last week college students demonstrated in several
cities to mark the day that total U.S. student loan debt reached $1
trillion. Yikes! In seconds, that's 32,000 years!
But recently I was at a
meeting during which people were discussing their student debts and
I asked, probably unkindly: What were you thinking?! They patiently
explained: It's just accepted that if one wants to pursue a career
with a college requirement, one has to borrow in anticipation of
making a good living.
I've been thinking
about this ever since. Never mind that because of the economy, the
expectation of making a good living is no longer necessarily viable.
In the past, people who, unlike me, did borrow and graduate, went on
to make a lot more money than I did. Maybe, then, they are debt-free
today just as I am. Maybe.
But I have a feeling
that borrowing can easily become a habit.
I admit I didn't really
care about getting a college degree anyhow; didn't know at the time
I ran out of money what I wanted to be when I grew up.
What if I'd really
wanted to be a lawyer, librarian, whatever, requiring a degree?
Would I have borrowed? How much?
I've recently read
about senior citizens like me who still owe for student loans.
Yikes!
My dream was to travel,
and because of being a Navy wife and then later, with travel a
priority for my savings, I did visit the places I most wanted to
see. But what if I'd reached age 60 and still not seen Paris,
Greece, Ireland, or the Alps? Would I have borrowed then, for a
non-essential European vacation, in last-chance desperation? Is
there any non-essential I would have gone into debt for?
The answer is no. But
that leads to a bigger question: What would our economy be like,
where would some of our most productive citizens be, if everyone was
like me?
For one thing,
capitalism would barely exist, except to fund investment in major,
essential enterprises.
Government would borrow
only for infrastructure and war. Life on earth would be a few
centuries closer to the way it was 32,000 years ago, when human
beings first evolved into basket-weavers, and no one was in debt.
So debt drives
civilization, and all people fortunately aren't like me. There's a
happy medium out there somewhere, a few billion seconds behind where
we are today.
NOTE: The above images are
borrowed from "US
Debt Visualized in $100 Bills" and "A
visualization of United States debt" for this presentation of
Barbara's column. If you're not overwhelmed enough yet, visit those
sites for more visualizations and further astonishment.