National debt recently passed 19 trillion dollars (according to usdebtclock.org) and shows no sign of abating. The public debt is serviced through taxation of the citizenry – so why isn’t there a more universal movement to rein in federal spending?
The answer may lie in a similar lack of fiscal restraint in the private lives of Americans, as noted by John Hayward of Breitbart.
“Perhaps one reason so many American voters tolerate a government drowning in red ink is that the citizens are carrying huge amounts of debt themselves.”
Hayward cites a recent Slate article which finds that “the average household that has credit card debt owes $16,000. That number is $27,000 for auto loans, $48,000 for student loans, and $169,000 for mortgage.” With household income continuing to stagnate, the private debt load seems as unlikely to be reduced from economic growth as the public debt load. In both cases, either increasing interest rates or another economic downturn could be disastrous as Hayward warns:
“The American credit load is an alarming precursor to crisis…. unsustainable consumer and government debt will end suddenly, and badly, with no good options in sight, and lots of angry questions about why stronger warnings were not issued sooner.“
The joint private/public debt crisis may have its origin in a changing attitude towards responsibility. Hayward advises that responsibility is the basis of our economic system and that turning away from will eventually lead to ruin:
“At its core, capitalism assumes responsibility is a vital component of liberty: we are not free, unless we accept responsibility for our actions. The growing credit crisis will end with government promising to negate responsibility….”
Read the whole piece here.