National Bankruptcy

This morning I read in the daily paper that the Federal Government might close down. From Associated Press, the exact words were “In a deepening struggle over spending, Republicans and Democrats swapped charges Thursday over a possible government shutdown when funding expires March 4 for most federal agencies.”

Along with state workers demonstrating in Wisconsin and Ohio, it appears that something everyone fears is finally on our doorstep: our country is drowning in debt. The debt crisis is unusually grave and it is no time to blame others. If we can unite on this issue, Republicans and Democrats alike, it may not be too late for resolution.

But don’t hold your breath. And don’t stick your head into the sand, either. It is time to expect a difficult episode in American history. Let’s just admit it and stop the denial coming from Washington: the country is broke. The official accumulated debt of the federal government has passed $14 trillion dollars and this is understated. According to the U.S. Treasury, in a report dated January 21, 2011, the public debt is just under $21 trillion dollars. This includes “off-budget” items like Fannie Mae and Freddie Mac, student loans, bailouts and other debts that are presumed uncollectible. And like the Energizer Bunny, it just keeps going and growing. This is a number that is, frankly, unimaginable. I have read commentators’ pieces where they write about trying to imagine this debt. It goes something like, “imagine you had a trillion dollars in $100 bills. Now stretch those bills from end to end and they would stretch from New York to St. Louis…” Sorry. I can’t imagine like that. Perhaps others can, but regardless it is a grim picture of greed, avarice and irresponsible politicians trying to buy the next election. There may not be any elections to buy in the not-so-distant future. Nearly every country that has undergone financial upheaval has seen a despot or the military take control, at least for a temporary period. Witness Chile under General Pinochet.

By the way, I have written nothing about Social Security, local governments and their problems, nor the public threats made by Moody’s, the debt-rating agency, to downgrade the credit rating of many states. This downgrade, if it occurs, will make borrowing more expensive if even possible by those states. Look for the state governments threatened by a downgrade to exercise bully efforts against Moody’s. And for heaven’s sake, think twice before purchasing a municipal bond.

You would think that with the peril this poses for every citizen, something would have already been done. Incredibly, just last December, three months ago, Congress (the previous one, not the sitting one) passed a 2% reduction in Social Security withholding. Intended to stimulate the economy, it adds to Social Security’s woes and serves to worsen the debt.

Other than being prudent in managing our own finances, we must ask God to guide our national leaders in the decisions to be made. We are still under the command to pray for our rulers (1 Timothy 2:1-2). If the debt problem of the United States is not handled properly and soon, we will face…

national bankruptcy.