We agreed to try Netflix free for a month. One of the first movies I thought I’d pull up to watch was I.O.U.S.A. If you Google it you’ll find you don’t need Netflix to watch it, you can watch it at the link: http://www.iousathemovie.com/ It’s an eye-opener and highlights the financial mess our National Debt has put us in. I thought it was really interesting when it discussed the 1956 Mid-East crisis when things were escalating between Great Britain and Egypt over the Suez Canal and Eisenhower threatened to get rid of some of the English debt the U.S. owned at the time. This caused the Brittish and French to pull out. If you ask me we are letting China put us in a very similar predicament in any number of similar situations….i.e. Taiwan for one.
It’s a few years old (2008) but highlights the ever growing problem of our National Debt. According to the National Debt Clock at the website:http://www.usdebtclock.org/ right now (7:28pm EST, February 18th, 2011) the National Debt stands at: $14,165,489,000,000 and growing so fast all the zeroes listed here don’t stop fast enough to write them down.
As a Nation this is unsustainable and every single American will personally bear the consequences of this crisis that is now upon us. I personally believe we will start bearing the burden when inflation increases, things begin costing more, job availability continues to diminish and taxes continue to increase. Not to mention our National Security will continue to weaken.
If you personally spend more money than you earn, you will pay the consequenses at some point if you don’t re-balance your budget. The current budget getting passed in Congress does NOTHING to remedy the budget crisis we’re in. It only makes it worse. While we have a National Debt at more than $14 TRILLION DOLLARS, it is increasing at another $1.48 – $1.645 TRILLION DOLLARS (MOST RECENT 2011 BUDGET PROPOSALS) annually with no end in sight. This doesn’t even mention unfunded entitlement programs. Some try to point their fingers at the Wars in Iraq and Afghanistan as the cause of our deficits. According to Reuters, about this time last year we had just topped $1 TRILLION DOLLARS in spending in the wars in Iraq and Afghanistan since 2001.
We are in the process of fiscally imploding and despite all the best budget cuts that Congress and the President can propose it won’t stop the implosion.
What can we do? As an average every-day American citizen I’d propose to you several ideas:
TRUST – The Lord
If you’re not trusting the Lord for your day-to-day existence and the blessings you do have, you need to first and foremost re-evaluate what you’re putting your trust in. Putting your trust in money is a poor substitute from putting your trust in the great Provider of all health, wealth and happiness. If you trust yourself for your personal security, health, finances and safety, that you need to re-evaluate your relationship with the Lord first. Your treasure needs to be invested in Him and His work first and foremost. If you ask me, tithing is a good start. If you don’t first trust him with some of what He already gave you, how can you expect Him to bless you with anything more. Ultimately, it is the Lord who grants wisdom and rewards it.
SAVE MONEY – by establishing an emergency fund and budget.
Imagine that – someone suggesting you should save money. First, figure out where your money is going by keeping track of your receipts for a month and looking closely at your credit card bill and bank statements. If you have 3-6 months of money saved up, that should provide you tremendous peace-of-mind living in a period of economic uncertainty. The reality is, most working Americans live paycheck-to-paycheck. Start small, limit some of your non-essential day-to-day expenses (Starbucks, Fast Food, Cable Television, Internet, maybe Reduce Cell Phone Plan) and put the money in a savings account. Make a conscious effort every day to do so, and within a few months you may have a week’s worth of essential expenses (Rent, Groceries, Utility Bills, Gas Money) saved up. Keep looking for non-essential expenses to cut and keep it up until you’ve got at least three months of essential expenses saved up.
GET RID OF DEBT
We may be enslaving ourselves nationally, but we shouldn’t enslave ourselves personally to debt. If you have consumer debt such as credit cards or car loans you are killing your financial future. Free yourself of such financial bondage. Factor these debts into your budget and pay down the principle. Start with your highest interest credit card. Once it’s paid off, pay off the others followed by any car loans and any other consumer debts you have.
PREPARE – for Increased Costs of Everything
Costs will go up this year. I could be wrong, but I personally think that inflation is going to start kicking in and we will see it in everything we buy. According to Gasbuddy.com National regular unleaded gas prices hover around $3.11 a gallon this month. February of last year the price was around $2.60 if I read the chart right. Current prices are of course much cheaper than they were in July of 2008, when they peaked around $4.11 a gallon, but I think we can definitely expect fuel prices to go up in the near future – especially going into this summer as it always tends to happen. When fuel prices go up due to demand and inflationary pressures everything goes up. I don’t think it’s a bad idea to stock up on 3-6 months of food that you would normally eat anyway. Make a trip to Sams Club or Costco and fill your pantry with enough food to at least get you through this coming summer. If prices of food don’t go up substantially this summer, at least you will save the money in gas and time making as many trips to the store.
PRECIOUS METALS – Consider it?
If you have started a budget, paid off your credit cards and car loans and other consumer based loans, saved 3-6 months of living expenses, and saved up 3-6 months of food start focusing on other things. If you believe in saving for “retirement” and the future why not invest a portion of such savings in precious metals? Don’t go berserk and look at the investment as a “long-term” investment. My Dad once told me that if you hand an ounce of gold a hundred years ago, you could take it to a tailor and buy a fine custom made, first class, men’s suit. If you had an ounce of gold today you could buy a fine custom made, first class, men’s suit. The point to me is to not see gold and silver as an investment that will make you rich, but to see it as a means of establishing relative stability in your savings as a hedge against inflation. I personally wouldn’t recommend investing more than 5-10% of your “long-term” savings into gold, silver, platinum, etc… especially given the liability aspect involved. Can’t help but think of those verses in the Bible such as James 5:1-7. Don’t be someone “heaping up treasure in the last days” in the event we are in the last days. Also remember what Jesus says in Matthew 5:19-21:
“Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; 20 but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. 21 For where your treasure is, there your heart will be also.”
I’m not a Theologian, but I wouldn’t recommend putting more money in gold and silver than what you’re tithing at your church.
Anyway, these are all just a few ideas I’ve been throwing around these past weeks and months. Paying down your mortgage is also a good idea if you were to ask me, given the amount of interest you can save in the long-run.
I just checked the National Debt Clock again at 8:35 pm Eastern Standard Time and it’s now $14,165,590,000,000 and increasing a total of 101,000,000 dollars more than when I started this blog a few minutes ago.
I’m not expert on this stuff, just a common American thinking about the seriousness of our National financial situation. Let me know if you disagree or see things differently.