National Debt a Serious Threat

National Debt a Serious Threat
by JBS President Emeritus John F. McManus

Only recently, rioting broke out in Venezuela when supermarkets had nothing on the shelves. A few years earlier, the people of Zimbabwe found their supermarkets empty and their hope to obtain basic necessities vanished. In both of these cases, people turned to the American dollar as something of value that could restore a semblance of normality. But, is the U.S. dollar’s reliability unshakable? Could its value shrink to nothingness as did the Venezuela Bolivar and the Zimbabwean Dollar?

Image from pixabay by Rilsonav, CCO Creative Commons.

Money isn’t something to fool with. Where there are reliable pieces of paper that signify honest value, commerce thrives, goods and services are readily available, and next to nobody worries about the future. The key here is the complete meaning of “reliable.” In the United States today, the reliability of our currency continues to shrink. The rise in popularity of “virtual” currency such as Bitcoin provides evidence of trouble ahead.

During the 20th Century, the almighty U.S. dollar descended from being “good as gold,” to being “good as silver,” to being as good as the promises of most politicians. American currency went from history’s most reliable money to currency backed by nothing. The value of the “almighty dollar” continues to shrink. Venezuela and Zimbabwe, here we come.

Never one to miss an opportunity to trash her Republican opponents, former House Speaker Democrat Nancy Pelosi (now downgraded to House Minority Leader itching to get back to being Speaker) told the press recently that the current Republican-controlled Congress is “robbing from the future by increasing the national debt.” While her statement is correct, she completely ignored her own complicity in steering the dollar toward worthlessness.

When she served as House Speaker from January 2007 until January 2011, the national debt rose $5.3 trillion – more than $1.3 trillion per year. After the Democrats lost majority status at the start of 2011, Republicans took over and the national debt rose from $14 trillion to $20 trillion. In other words, the debt continued to rise, not as fast as when Pelosi led the House but still substantially. So, Nancy Pelosi who points only at Republican profligacy, is correct when she claims that GOP management of the nation’s finances is miserable. But she managed to ignore that it was even more miserable when she held the House’s most powerful post.

Any argument between Democrats and Republicans about whose leaders are more guilty of ongoing fiscal suicide is meaningless. The focus should be on the indisputable fact that our politicians are indeed taking the nation to the edge of a fiscal cliff. So the Republican response just enacted is a tax cut. But what the country needs is realistic consideration of the debt. Allowing the people to keep more dollars that are steadily decreasing in value – because of adding to the debt with freshly printed unbacked currency – doesn’t solve the major problem. It may even speed up the arrival of what happened in Venezuela and Zimbabwe. It has happened over and over again throughout the course of history when fiat money (make-believe money that is unbacked) becomes a substitute for honest backed currency that is exchangeable for the valuable commodity on which it is based.

Pelosi is wrong to target Republicans while essentially giving herself and her Democrats a pass. But also wrong are Boehner and Ryan her two successors. For their failure to take the nation away from “good as gold” currency, so are former presidents Roosevelt, Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Reagan, Bush I, Clinton, Bush II, and Obama. And let’s not leave out of this list of shameful leaders the current president who seems unwilling to break the pattern of adding to the nation’s indebtedness. As his predecessors did, he is ignoring the escalating debt – the elephant in the nation’s living room – and continuing down the path that will make what happened in Venezuela and Zimbabwe resemble child’s play.

America needs a return to honest money – and that means money backed by a valuable commodity such as gold or silver, or both.

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McManus_2Mr. McManus served in the U.S. Marine Corps in the late 1950s and joined the staff of The John Birch Society in August 1966. He has served various roles for the organization including Field Coordinator, Director of Public Affairs, and President. Mr. McManus has appeared on hundreds of radio and television programs and is also author of a number of educational DVDs and books. Now President Emeritus, he continues his involvement with the Society through public speaking and writing for this blog, the JBS Bulletin, and The New American.


Debt Ceiling Will Be Raised

Debt Ceiling Will Be Raised
by JBS President Emeritus John F. McManus

“If you give someone the power to inflate the currency, he will.” That bit of economic truth ranks alongside any indisputable fact – such as the sun will rise in the east tomorrow morning.

US National Debt Clock Image from Wikimedia Commons Credit: ©Benoit Prieur (Agamitsudo) – CC-BY-SA 4.0.

There’s another economic truism ranking just as high. It is: “Raising the national debt ceiling will soon be followed by a need to do so again.” In other words, refusal to address the problem of national indebtedness in the proper manner – reducing the size of bloated government – will assure that the problem will only invite more increases.

The federal government will reach its allowable indebtedness on September 29th. If congressional permission to exceed the amount of red ink currently allowed isn’t forthcoming prior to the September date, the U.S. government will then be in default, something no sane person wants. Failure to increase the debt ceiling will bring about an unwanted economic catastrophe. So we can expect Congress to pass an increase just as surely as we can expect today’s sun to set in the west.

Speaking at an event in his home state of Kentucky on August 21st, Senator Mitch McConnell, the Senate’s Majority Leader, announced, “There is zero chance – no chance – we will not raise the debt ceiling.” People in that audience were assured, therefore, that reckless government spending would increase. Sleep well, fellow Americans.

McConnell and practically all of his congressional colleagues in both the Senate and the House will tell anyone they have no choice, that it’s either more debt or default. It’s a classic case of simply ignoring truth. There is another alternative: Reduce the size and cost of government.

The federal government spends billions upon billions in an array of unconstitutional programs that never should have been started in the first place. Education is one. Others include unconstitutional wars, health care, housing, welfare, foreign aid, environment, and so on. Every one of these gigantic spending spigots have not only sped our nation into near insolvency, the efforts of each have made matters worse in each of the areas where their illegal and unconstitutional activity has become common. Educational quality has plummeted; federal housing projects have become death traps; the cost of medical care has risen and forecasts of its availability are unsettling to say the least.

Very few Americans are aware that the U.S. government already includes owing both China and Japan more than one trillion dollars. Lesser amounts, hardly inconsequential because they haven’t exceeded the trillion dollar threshold, are owed to other nations. The admitted national debt already tops $20 trillion, a figure that makes the U.S. the most heavily indebted nation in all of history.

Can debt holders such as China (that’s Communist China to be more specific) dictate U.S. policy?  Has indebtedness watered down or even cancelled U.S. ability to act in our nation’s interests in the foreign policy arena?  Have our own leaders given China, Japan, and other large debt holders an opportunity to dictate U.S. decision-making? The answers are yes.

Even worse, has U.S. indebtedness placed Uncle Sam’s neck in a noose controlled by the United Nations? The UN’s International Monetary Fund recently bailed out Greece and, in the process, required Greece to follow its dictates about how to run that once-independent nation. Is that where the U.S. is heading? God forbid that the necessity might arise when the UN would step in to bail out our nation.

Raising the debt ceiling is simply postponing a dire reckoning that will surely arrive. Reducing the size, power, and expense of unconstitutional government is the only sane policy. Only the American people can force leaders to act sanely. Will you help?

A good start would be to contact Congress to abolish the Federal Reserve. Then consider joining our effort to rein in the federal government!

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McManus_2Mr. McManus served in the U.S. Marine Corps in the late 1950s and joined the staff of The John Birch Society in August 1966. He has served various roles for the organization including Field Coordinator, Director of Public Affairs, and President. Mr. McManus has appeared on hundreds of radio and television programs and is also author of a number of educational DVDs and books. Now President Emeritus, he continues his involvement with the Society through public speaking and writing for this blog, the JBS Bulletin, and The New American.


Worrisome National Debt: What We Need To Do

Worrisome National Debt
by JBS President Emeritus John F. McManus

Close to 50 years ago, a fairly widespread put-down of worries about the national debt included the ridiculous claim that federal indebtedness was nothing to worry about because “we owe it to ourselves.” Anyone trying to get his portion would find how ridiculous that claim was. And 50 years ago, the national debt was less than five percent of the astronomical total that has been reached today.

The United States has become the greatest debtor nation in all history. This is a situation that ought to be front-page news every day – but it isn’t (Photo from Flickr by Chris Potter www.ccPixs.com, CC BY 2.0).

At the end of the first week in May 2017, the admitted national debt stood at $19.9 trillion. That’s $19,900,000,000,000, an amount hard even to imagine. Before the current month passes into history, the $20 trillion plateau will be reached. Can a nation spend itself into extinction? The answer is yes. And our nation is doing exactly that. Let’s look at some figures.

When the U.S. government spends more than it takes in, it borrows. It might seem a bit unbelievable, but one of the two greatest holders of U.S. government debt is Communist China. The Beijing regime and Japan each hold more than $1 trillion in IOUs signed by U.S. officials. This means that our government is in hock to China, not only for the amount the Chinese Reds provided, but also for interest on the trillion dollars they have provided.

China happens to be a country whose leaders have declared America to be an enemy they seek to destroy. Beyond what is sent to China annually, interest payments go to Japan, Britain, Ireland, Switzerland, and numerous other countries holding U.S. bonds. And, of course, many American citizens have loaned money to the government, and they have to be paid interest as well.

Interest payments to other countries – and to any private individual who holds a U.S. bond – total $442 billion per year. That’s not too far from the current annual deficit. If there were no need to send interest payments to existing creditors, Congress and the president might be able to balance the budget. But interest has to be paid.

The situation described above isn’t the whole story. The $19.9 trillion admitted indebtedness happens to be a grossly incomplete amount because unfunded future obligations aren’t considered. The two largest and unfunded federal programs are Medicare/Medicaid and Social Security. These two currently spend more that $2 trillion per year and the money to keep them going has to be borrowed. The noose around our country’s neck is getting tighter every day.

The United States has become the greatest debtor nation in all history. This is a situation that ought to be front-page news every day – but it isn’t. It ought to be the lead item on the daily newscasts on television and radio – but it isn’t. It ought to be a topic for serious examination in economics classes at colleges and even high schools – but it isn’t.

The accumulated national debt of the United States arrived at the $1 trillion figure during the Reagan administration. Each succeeding president (Bush I, Clinton, Bush II, and Obama) has presided over steadily worsening increases. Annual deficit spending and borrowing to cover it reached new highs during the Obama years. The George W. Bush years weren’t much better.

Just a brief glimpse at all of this red ink is frightening. So, the question arises: What to do about it? How about terminating foreign aid? America, drowning in debt, actually gives away money. How about getting the federal government out of education, energy, medical care, and other areas where it has no constitutional authorization to be involved? How about putting an end to the U.S. military being the policeman of the world?

In other words, how about a real change at the top that would see our leaders standing solidly behind their oath to abide by the Constitution? If they would honor their oath, deficit spending would cease, paying off creditors would begin, and America would soon cease being in hock to other nations – especially to any that are sworn enemies.

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McManus_2Mr. McManus served in the U.S. Marine Corps in the late 1950s and joined the staff of The John Birch Society in August 1966. He has served various roles for the organization including Field Coordinator, Director of Public Affairs, and President. Mr. McManus has appeared on hundreds of radio and television programs and is also author of a number of educational DVDs and books. Now President Emeritus, he continues his involvement with the Society through public speaking and writing for this blog, the JBS Bulletin, and The New American.


Our Threatening National Debt

Our Threatening National Debt
by JBS President Emeritus John F. McManus

When a new president takes office, he is saddled with a budget agreed to by his predecessor for the first nine months of his term. This procedure occurs because the federal fiscal year begins on the first day of October every year. Therefore the additions to the national debt attributable to Barack Obama’s eight years in office are not complete. But we can get an idea of the increase under his watch by looking at what is rightfully attributable to his leadership.

National Debt Increases from 2001 to 2016 (Image from Wikimedia Commons).

National Debt Increases from 2001 to 2016 (image from Farcaster at English Wikipedia [CC BY-SA 3.0 or GFDL], via Wikimedia Commons).

Author/commentator Terence Jeffrey claims the red ink accumulated by Mr. Obama totaled $9,335,000,000,000 on the day he left office. That’s $9.3 trillion. The previous deficit accumulated by a two-term president was $4.9 trillion for the George W. Bush years (2201-2009). That’s a little bit above half of what his successor, Barack Obama, piled up.

Congress produces a federal budget. A president can veto what he is given but presidents rarely use that constitutional power because no occupant of the White House wants the blame for government shutdown. So the planned deficit wins approval and the nation proceeds down a path to extinction. Extinction? Yes, the indebtedness cannot continue. As the old saying goes, “The piper will be paid.” Who might that “piper” be? Probably world government with total power.

A review of past decades and the indebtedness amassed by a succession of president indicates ascending guilt for each of the past 13 chief executives. They have all contributed to placing our nation’s neck in a noose, the most recent being the worst culprits. Here are some debt figures supplied by the Treasury Department.

Roosevelt (1933-1945) $.236 trillion, up 1,048% from Hoover

Truman (1945-1953) $.007 trillion, up 3% from Roosevelt

Eisenhower (1953-1961) $.023 trillion, up 9% from Truman

Kennedy (1961-1963) $.023 trillion, up 8% from Eisenhower

Johnson (1963-1969) $.042 trillion, up 13% from Kennedy

Nixon (1969-1974) $.121 trillion, up 34% from Johnson

Ford (1974-1977) $.224 trillion, up 47% from Nixon

Carter (1977-1981) $.299 trillion, up 43% from Ford

Reagan (1981-1989) $1.860 trillion, up 186% from Carter

Bush I (1989-1993) $1.554 trillion, up 54% from Reagan

Clinton (1993-2001) $1.396 trillion, up 32 % from Bush

Bush II (2001-2009) $5.849 trillion, up 101% from Clinton

Obama (2009-2017) $7.917 trillion, up 68% from Bush II

(The figure for the Obama years is not complete.)

The largest percentage increase (186%) occurred during the Reagan years when the debt total flew through the $1 trillion plateau. The largest dollar increase occurred during the Obama years (not yet complete).

What does all this mean? It means the U.S. government is spending the nation into bankruptcy. As economic guru Doug Casey states: “Giving politicians the ability to borrow is like giving a teenager a bottle of whiskey and the keys to a Corvette. The debt is an albatross around the necks of the next several generations: it’s criminal to make indentured servants out of people who aren’t even born yet.”

Congress is the key to either fiscal sanity or fiscal suicide. If you value freedom and love your children, let your representative and your two senators hear from you.

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McManus_2Mr. McManus served in the U.S. Marine Corps in the late 1950s and joined the staff of The John Birch Society in August 1966. He has served various roles for the organization including Field Coordinator, Director of Public Affairs, and President. Mr. McManus has appeared on hundreds of radio and television programs and is also author of a number of educational DVDs and books. Now President Emeritus, he continues his involvement with the Society through public speaking and writing for this blog, the JBS Bulletin, and The New American.