Tuesday, April 19, 2016

What Keeps Me Awake at Night?

Someone asked me recently, "What keeps me awake at night?"
I thought it was a great question. For me there is really only one answer. The amount of debt that is owed in this country by Americans and the amount of debt owed by our country. Why is that, you ask?

I have been on this earth for almost 7 decades and I have never seen so much debt. To me, it is down right scary. All you have to remember is what happened to the subprime mortgage market. It all started in 2001 and then it started to unravel in 2006. For years, people had been approved for mortgages with little or no down payment without the resources to pay them back. Interest only mortgages were given that in a few years would reset to a higher loan amount.  ARMS ( Adjustable Rate Mortgages) became very popular. The interest rates on these mortgages reset with changes in market interest rates mostly to a higher interest rate or lower depending on market conditions. At the time the economy benefited from the building boom which peaked in 2005. However, it was all a house of cards. It unraveled with the subprime mortgage defaults that began in 2006 and  affected our economy and the building trades. When that started happening, home prices went south and  people had mortgages that were higher than their homes were worth. Sales fell and people who had mortgages that they couldn't afford defaulted and  the great foreclosure market began that affects our economy to this day.  This is just a synopsis of what happened. We have all seen the effects.

I worry that the amount of outstanding debt in this country both by individuals and our government is the next crash. We have all seen the borrowing by the government over the past 8 years. We owe over 19 trillion dollars in debt as a country and it is climbing every minute.  The GAO ( Government Accountability Office ) says in a few years we will owe as a country, 100% of GDP (Gross Domestic Product) if nothing is done to pay it back.  We owe 74% now which is really outrageous and dangerous. As an example we only owed 43% right after WWII. We’re going to owe more than our entire economy is producing and by definition this is not sustainable.

The GAO found in a recent audit that improper payments of $136.7 billion dollars had been made by our government  in 2015. The same audit has called into question the reliability of our government's financial statements.  If a federal entity purchases a good or service, that cost should match the revenue recorded by the federal entity that sold the good or service. The report found that this was not always the case and found hundreds of billions of dollars in differences between transactions between federal entities. According to the audit, these weaknesses will eventually harm the government’s ability to reliably report their assets, liabilities, and costs, and this will prevent the government from having the information to operate in an efficient and effective manner.

For 7 years our government has been digitally creating money. They don't even mint it any more. For the same time period, they have been holding inflation at 2% by manipulating interest rates and creating new dollars.  I know this is not sustainable. And some of the presidential candidates want to spend billions of  dollars more than this country has on college tuition and other freebie programs, etc. This is all leading to the bankruptcy of America. As an accountant this scares the hell out of me. We will soon be insolvent as a  nation.

On the other side of the coin leading to insolvency is the amount of debt that the average American family owes which has been estimated at  $ 68,000. This takes into account all Americans and since there are a lot of Americans who owe nothing, the amount owed by those who do is a lot higher.   A recent Pew study says Americans took on more credit card in the 4th quarter of 2015 than in all of 2009, 2010, and 2011 combined. That amount is  staggering. I don't see that the economy is getting better if people have to rely on credit card debt to get by. 

Home sales are again slowing down, credit card debt is increasing, the Federal government is spending like a drunken sailor, and middle class America is paying the highest percentage of taxes in the country. You tell me if that scares you!

If things don't change and we don't start paying off the debt in this country and in our own personal households, we will look like a third world country in a few years. No one will get social welfare because the middle class will be tapped out. Bottom line is there will be no one to pay for anybody. We will all be trying to survive in a country that is bankrupt. Everyone will be on their own and responsible for their own survival. That is what scares the hell out of me!

So what can we do? We can pay off our own debt and elect leaders who are fiscally responsible. Right now we have established Democrats and Republicans that are not looking out for the average American's best interests. They are more interested in furthering their own interests than American's. They are powerful people who collaborate with whatever the lobbyists want. Things need to change so that the next President looks out for the American citizens interests not everyone else's. We need a President who will turn our economy around because he or she has the business background to do it. A Presidential candidate who will hire the brightest people in the country who will look out for American's interests not the rest of the worlds.  These establishment politicians, who are scared to death of losing their power, have gotten us all into this mess and we need a strong person with a brain in their head to start to get us out.

So set your budgets and pay off your debt. It's the best thing you can do for your own families. Then do your research and make sure that you vote this election for someone that will get us out of this mess and not perpetuate the direction we are going which is into bankruptcy. This is in my estimation the most important election since WWII.

Now you know what keeps me awake at night! I am off to vote in our New York Primary this afternoon once the polls open here at noontime. It is my duty as a proud American! And hopefully my vote will help put the right person into nomination for President.


  1. AMEN! I really became concerned, when my late husband, who was in building construction, was so busy, that he was making a lot of money, but didn't have time to think! We knew then, that the U.S economy was in a bubble, and it would soon burst! It did, and it has never really recovered....

    I agree with you, that at this point in time, we need someone with business sense to lead, who in turn will select able and knowledgeable people to advising positions in other areas of government.
    I live in CA. and we will be voting in June.

  2. Sadly I don't like any of the remaining candidates. I voted in the Virginia primary, but I don't think that I can in good conscious vote for any of the remaining candidates in November. I think that our country is in big trouble. :(

    1. I understand how you feel. But if you don't vote, you will be allowing the opposite party to get in. I in good conscience can not allow the policies that have run this country for 8 years to continue. Just my $ .02!

  3. Hi Enid,

    The best of luck with your primary voting in June. Another hour and the returns should start coming in here.

  4. I agree with you completely! I've had enough of the career politicians who only care about what benefits themselves and not the American people they are supposedly working for. It's time for real change.

    1. I agree and this carries across both parties. The politicians have become way too powerful and they don't care about what is good for America. It's time for big changes.

  5. I agree with everything you wrote. It's all so frightening. I keep voting but nothing changes. We're debt free, but i don't feel safe. The government should make us feel safe and they don't; they are the problem.

    1. Hi Momsav,

      I agree. This is why it is so imperative to get someone who is not an established politician into office. When ours leaders have lost their way and only think about what will help their bottom line,it is time they leave office.

      What really frightens me is Hillary Clinton getting into office. She is dishonest and untrustworthy.

      With United Health Care pulling out of the Affordable Care Act, they now have their excuse to go to a single payer plan. And this is what Hillary Clinton has always wanted for health care. So if she gets into office, you can kiss your employee healthcare good bye. You think that the ACA has done nothing but up your health insurance rates, just wait until she puts the single payer plan in.
      Everyone will pay a fortune including the poor.

      BTW, United Health Group pretty much wrote the ACA plan and now they are opting out. It shows me that they designed it to fail so that they could go to the single payer plan.

  6. I just wanted to thank you for writing your blog. Like you, I have no one to go to, my Mom who was a champion at stretching a dollar has passed away before I could ask advice along with all of my Aunts. My husband and I are nearing retirement and I find myself getting more anxious and it gets closer. I wish we had started much much earlier in watching our money spending habits.

    1. Hi Shelby,

      You are welcome. It helps to start early but save as much as you can now. Better late than never.