USA Defaults & World Debt Explodes
Posted by Orrin Woodward on November 9, 2015
Still wondering if the gold standard really protected the world’s citizens from increased debt? Here is inarguable data that, in 1971, when President Richard Nixon took America off the last vestige of the Gold Standard (when he killed Bretton-Woods agreement), he launched the debt explosion trapping citizens across the civilized world. For without any commodity to restrict the production of paper money, it becomes a 100% Fiat standard that can be produced without restraint. This is a huge win for the Financial Elites by increased profits and prosperity and a huge loss for society’s citizens by the destruction of their wealth and wellbeing.
LIFE Leadership has a plan to help people escape the Financial Matrix by learning the Defense, Offense, and the Playing Field (what’s the Financial Matrix and how to protect your family). Here is the latest data.
The St. Louis Federal Reserve announced the total US debt (the combination of government, business, mortgage, and consumer debt) in the first quarter of 2014 totaled nearly $59.4 trillion. That’s a boatload of debt! Even at just 5% interest, this amounts to over $3 trillion in interest to service the debt. That’s 3,000,000,000,000 dollars every year!
Compare this to the total debt of $2.2 trillion just forty years ago and it doesn’t take a statistician to recognize something has significantly changed in how society treats debt. Forty years ago, the total debt was less than the interest paid to service the debt today. The debt, unbelievably, has increased more than twenty-seven times in the last forty years! If this doesn’t wake someone up to the increasing debt crisis of Western nations, nothing will.
Fortunately, many people are waking up. Author James Butler is one of them. He wrote in a recent op-ed piece, “In 50 short years, debt has gone from being a luxury for a few to a convenience for many to an addiction for most to a disease for all. It is a virus that has spread to every aspect of our economy, from a consumer using a credit card to buy a $0.75 candy bar in a vending machine to a government borrowing $17 trillion to keep the lights on.”
In other words, households, businesses, and governments (at the local, state, and federal levels) have all been seduced into the web of debt to generate the $59.4 trillion issue. Disastrously, however, it’s the people who end up paying for the debt sins of business and government. Remember, governments do not earn income, but can only income from its citizens. Thus, when government debt expands (surging past $20 trillion now), the people’s taxes are increased in order to pay the growing amount of interest due. Has anyone else noticed how much money is taken out of their paychecks in federal, state, and local taxes? Moreover, when Social Security, property taxes, and various licensing fees are added in, it’s no wonder most people must borrow to live.
Finally, let’s not forget about the corporate debt that amounts to nearly $20 trillion in the United States alone. In order to service this debt, corporations increase the price of the products and services they sell. In other words, a company’s increased debt equates to consumers increased prices. For a company merely combines its corporate taxes, social security taxes, and interests on debt into its other cost to arrive at the price it can sell its product and still make a profit. Shockingly, the already overloaded households must pay, not only for its own lack of fiscal restraint, but also for the corporations’ and governments’ lack of restraint as well. Perhaps a visual representation of the Financial Matrix debt trap will help emphasize the importance of living debt-free.