Fear: Recession? US Debt? Stock Market Crashing? and You.

Citizens Hold Up America

Financial Armageddon? It seems to me like as America is faltering, the rest of the world is falling down with it. I noticed that not just only the rich folk have lost money, but many middle class citizens have lost their jobs, retirement savings, and face a very uncertain future. Peoples are hurting right at home and that concerns me.

Calming down.

Well first off, even with the recent news about the country and economy, I try not to panic and get into a scare because one thing is for sure: The media uses fear and panic in their articles and headlines because it gets our attention and it sells. After all, the media is still out to make profit on top of distributing information, news, and entertainment to you in an “unbiased” way.

Now back to the fear and panicking…

-The US has a national debt of over $10,000,000,000,000 - That’s $10 trillion in debt, which is a very big number.
-The stock market has fallen 40% since it’s highs, and has no end to the falling in sight.
-Unemployment in the US is over 6%, a 5 year high.

All this is quite scary, because I’m thinking how will this affect my job, home, family, business, and future? The media has definitely grabbed my attention, but what am I to make out of all this? Then I realized that the key to overcoming fear is knowledge. Once I have more knowledge of the issues and problems that face the country, then I can make better choices for myself and for the people in my communities.

The knowledge and facts.

Here are some interesting facts that that whet my appetite for knowledge^1,2:
-Because of our debt, $261 billion is paid to interest for 2008.
-$4 trillion of our current debt was added during the last 8 years, and an estimated $1 trillion of that in 2008.
-Over 50% of the US total debt of $10+ trillion is owed to itself from the Social Security and Medicare/Medicaid trust funds
-Double digit growth in GDP of our economy will be needed for the next 75 years in order for the country to be able to “grow its way” out of these fiscal challenges.

From a very common sense financial point of view, the country is just overspending when it simply doesn’t have the money to spend. The more the government spends and needs to borrow to fund that spending, the more interest we will have to pay over the years. The 2008 budget was $2.9 trillion, so almost 10% of our tax dollars are being used to pay interest. It is naive to think we can grow ourselves out of this problem, because our economy has only grown 3.2% per year during the 1990’s, which is no where near the needed double digit growth. With the current situation, it is very clear that we need to have more discipline and diligence as a country and as responsible American citizens. I thought it mind boggling when I read that the money the government receives from Social Security and Medicare/Medicaid taxes are used to balance off the spending in the annual budget. But that money needs to be paid back to those funds in order for the government to afford to make payments to its citizens when they retire and need healthcare. I realized that the government is not only borrowing from our retirement and healthcare taxes to spend but also using the funds straight to balance its budget at the same time. So the problem we face as a nation is bigger than any of us think.

What can I do?

Go out and find out: It took me only a few days to do searches on the internet and read up on wikipedia and news articles about the true facts of the situation. A good place to start is the Official US Government Accountability Office’s 2008 Citizen’s Guide. Do your own research, don’t take my word for it. Once you know more, you know what questions to ask of your government officials, and who to vote into (or out of) office so that they can fight for your interests. I am not the best informer, but I figured I shared many of the same concerns that all of us are facing. And I believe that a good first step is to build up our knowledge so we don’t get tricked by deceiving politicians and special interest groups.

My challenge to you is to go out and find out more. There is never an end to increasing your knowledge to fight fear and make the right choices. As I do here, do the same and let those around you know that they should care and not leave our future in the hands of the few and elite.

I hope you can leave some comments on what you found, the ways you spread the word, and what challenges you face as an individual citizen.

–References–

1. http://en.wikipedia.org/wiki/United_States_federal_budget
2. http://en.wikipedia.org/wiki/Us_debt