You’re on the Titanic…Grab Your Lifeboat!

The National Debt is approaching 16.5 trillion dollars.  In numbers I can actually fathom, that means each American Citizen is on the line for $52,260.00.  The reality is not every citizen pays taxes, which brings the debt burden onto each taxpayer to a grand total of $145,887.00.  Because of the exorbitant amount of Government programs ranging from Obamacare, Social Security, Medicare and Medicaid, we spend more than we take in.  The trajectory is literally crippling individuals and our nation.  We are on the Titanic and it’s inevitably going down…it’s just a question of when.  One would think that we could change course to avoid sinking the Titanic…and the truth is we could avoid it, but we won’t.

The Way You’d Deal With It
In theory there are 3 ways to deal with the National Debt.  Each solution is something you’d think of for your own budget.  Most people would adopt the following strategy.  Cut spending.  You might cut back on your morning Starbucks run, downgrade from the BMW to a Honda, or choose to stay at home instead of taking an expensive Hawaii vacation.  Does it mean a lower standard of living?  Sure, but you’re able to get back to manageable levels of debt.  Because cutting things from your budget is usually easier than making more money, the simplest solution for the average person is to cut spending.

The government doesn’t like this option because it means cutting programs and funding…and that makes the people that benefit from those programs angry.  Naturally, this leads us to the second option, which is to increase revenue.  The average person has a hard time making more money because it means taking on a second job or getting a raise.  The government doesn’t have that problem.  Using the deceptive words of “increasing revenue” (i.e. raising taxes), the government has access to easy money by taxing its citizens. While they pretend to care, it’s the simplest way to try to keep pace with out-of-control spending.  Raise Taxes!!!….err, wait….let’s introduce the second way to deal with the deficit in the politically correct way…Increase Revenue!!!

The third option you and I have in our personal lives is to do nothing.  We continue to go to Starbucks, drive our BMW, AND take the Hawaii vacation.  We bury our head in the sand as we amass unsustainable amounts of debt.  We pretend that this party can go on forever even though beneath the surface we know the party must end.  The day of reckoning eventually comes and out of sheer force, our creditors fix our debt problem for us.  Your BMW is repo’d, your credit card no longer works at Starbucks and Hawaii is the furthest place on earth.  Could you see it coming?  Of course you could, but you chose to do nothing.

The Way It WILL Play Out
The U.S. government (and all previous governments throughout history) always choose the third option….Do nothing.   Politicians all see the iceberg coming, perhaps even more clearly than the average citizen, but they won’t do anything about it.  Why?  It means risking their political career.  If they are the whistle blower, they will become the target of angry people who like or depend on particular program.  Take Medicare and Medicaid for example, any politician that proposes making changes to those programs is not only demagogued, but they are demagogued from those in their opposing party…or even from their own party.  In President Obama’s recent inauguration speech, he said nothing of reforming the real drivers of the deficit.  While he know’s we can’t keep these programs running in their current form, he would rather tread lightly to give the next Democrat the best shot at the presidency.  He and his fellow politicians will keep kicking the can down the road because being the whistle blower could mean doing the right thing, but at the cost of power, money, and reputation.  The deficit will continue to go up until our creditors no longer view us a financially solvent.  Then the party stops.  Politicians want to play hot potato with the debt and keep the status quo as long as they can, hoping they are not in power when the party finally ends.

Just like Greece, we are living on borrowed time.  The day or reckoning is coming and it’s time to prepare.  There are classic doomsday preppers that build bunkers and stockpile ammunition.  While I wouldn’t go that far, I do think its wise and necessary to start accumulating assets…things that have intrinsic value.  The four things I personally would have to prepare for the crash are:

1.  Gold or Silver.  When our debt become too much, the government will print more and more dollars and devalue the currency.  They are already doing that now.  Gold and Silver go up in value as the dollar goes down.

2.  Housing.  People will always need a place to live so paying off a mortgage as quickly as possible can cut out your biggest monthly expense.

3.  Food Storage.  When the economy collapses, many things will plummet in value, while other things like food will become more expensive.  A shortage could make that even worse so having several months of food storage will prove critical.

4.  Seed Banks or Survival Seed Kits.  For long-term, sustainable food, a Survival Seed Kit provides peace of mind to know you can always feed your family, regardless of the economy or government.

The Titanic is going down eventually because the whistle blowers that can stop us from hitting the iceberg won’t blow the whistle.  Now is the time to buy your lifeboat.

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