Imagine that your income is unable to support your current means, and every day only brings you further into economic downfall. Imagine having credit card after credit card within your wallet, all fully maxed out to pay the negative balances of the others. The words “VISA” and “Mastercard” float around in their blinding holograms whenever you reach for some funds, amassing together and mocking your desperate situation. Your bill statements would come back each month yelling, in bright scarlet capitalized letters, their need to be paid. Their shrieks pound and penetrate your mind daily, forcing you to pay vivid attention with blood-red eyes a problem that you cannot reasonably fix. Imagine having to walk into yet another bank, falsely invigorated to promote your status to the world, to plead them for a loan. Your lies about how you have a fantastic opportunity for huge profits, and how only the need for capital restricts your path, manage to convince them for yet another loan. What would you do? What could you do?
Most would believe that the prior example would lead one to conclude that the imagined person would be someone especially within the lower middle class or even perhaps below the poverty line. Of course, that would be a reasonable assumption; no reasonable adults would keep up such a charade, or live above their reasonable capability to provide. The only exceptions would be those who have an income that cannot provide for their most basic of necessities, hence the need to borrow. That reveals a troubling issue within our current economic systems as it were, but the model is not restricted only to singular individuals. No matter our age or economic status, we are all afflicted by the effects of this plague. The backbones of our civilizations are infected; our governments are being crushed underneath its weight.
For clarification, a simplified illustration to our debt crisis can be drawn. A man earns
$900 every month, and needs $1000 for his expenses, ignoring the question of exactly how necessary they are. In order to meet his expenses, he has to borrow $100 from a lender. By the time the month ends, he has his needs met but has a total income of -$100. For the the next month, since he would still be stuck underneath the same circumstances, he would have to owe at least $200, assuming an impossible zero percent interest rate. Being continuously unable to pay the loans back, he would have to keep increasing his overall deficit by taking up more new loans to pay for the expiring old ones and the current deficit between his revenue and his expenditure. Expand this by changing a few numbers, and increasing the number of cycles by a large number, and you would basically have the current US debt situation.
Loans, by all means, are fine. They provide both a way for individuals to increase their current savings as well as for the borrower to have the resources to work on some profitable project. This sort of investment is actually vital to the growth of our society – there are many prospective ideas and innovations ready to be had, and people willing to spend the time to research into them, but money is almost always a limiting factor. Loans, however, can be separated into two different portions: one being for productive uses (that will result in an overall gain) and one being used for consumption. One can provide, and another is just a way to ignore the true problem at hand, to off load our own waste for the future to handle. Meanwhile, we’ll just live in our bliss and elevated standards of living, uncaring about how each second we wait plummets our future generations even further into the abyss.
The American government has over $14.3 trillion USD in debt, and is continuously increasing. With a deficit of $1.56 trillion every fiscal year, we are forced to issue further more bonds – promises of future funds in exchange for a smaller amount of today’s currency. What kind of gift are we leaving our children and their ancestors? With each second, the weight upon their shoulders increases; the imminent collapse grows in scale. Every second that we waste, we are $50,000 further into debt. We have to stop the cycle now.
As another expansion of the current problems, our social welfare systems are crippling us as well. They rely on the current population’s taxes to pay for the previous generation’s welfare, and those that are paying today will have to rely on funds provided by the next few generations. For example, one would pay $10 out of his salary every month for his future welfare. This $10 would then be distributed among the current retired population, in exchange for the promise that a similar amount would be available in the future. Once retired, one would then get the funds assigned to him, paid by the new generation. Of course, there are benefits to implementing this system. Assuming that the elderly and retired stay low or negligent in proportion the younger working populous, the incoming taxes would leave more than enough for the sustainment of the welfare program. This is because though many pay continuously for the promise of welfare in the future, few will actually cash in, leading to an evident surplus that could then be used in numerous applications. These can range from severely economically starved areas such as education and medical systems to the building of new beneficial infrastructure – economic and societal growth can be accomplished. Especially if used in raising the average salary per annum with no change in purchasing power parity, and decreasing unemployment, the effects can compound to create an even larger surplus.
This design is outdated, however, as medical advancements extend lifespans further, and luxurious standards of life push down the age of retirement. In addition, the average birth rate has decreased by nearly 50 percent in the last 80 years. This results in a exponentially growing ratio between retirees and the young population, as fewer babies are born to supplement the steadily aging previous generations. The problem underlies within the system’s need for a steady ratio between the old population and the younger, which reveals a necessity for the birth rate to continue increasing. For example, a small country has 200 elderly and 1800 workers, an optimistic start when compared to the current situation within the US. There about 56 million beneficiaries of the Social Security System this year, and only 158 million inserting funds into the program. Assuming that there are required at least three payees (workers) for each recipient of the fund, it is required that the next ‘generation’ be at least 5400 people. The situation would then become 1800 recipients, and 5400 workers. Following on, the next generations would have to have a population about 16200. The number will grow exponentially, and though they may seem meager at first – 16200 persons is a relatively small number, especially when compared to the 316 million that are currently living on US soil – it will grow. 20 phases and one would need to have a 10 digit population. It is an unsustainable pyramid scheme, where the lower levels are forced to pay the benefits of the generation above them, in hopes that the level after them would provide. They have to fall at some point, leaving a shattered system, and the only method to prolong its existence is to further raise taxes, borrow funds from an already heavily indebted government, or reduce payouts to an already impoverished selection of people – the system keeps roughly 40% of elderly out of poverty.
We are living beyond our means. We are alcoholics who have for far too long drunk their accursed syrup, penniless in truth but still continuing on the illusion in fear of what may happen outside of it. In reality, there are only two possible methods to save our children and grand-children’s generations. We can either completely give up (default), or we can cut spending and increase taxes. Both are uncomfortable decisions, one will shatter our economy and another will devastate our standards of life. But as our forefathers had fought and died for us, for the freedom of the generations after, shall we not sacrifice our comfort for the sake of the prosperity of our own children?
Imagine what could happen if we did cut spending on less ‘crucial’ endeavors and raised taxes to protect the others. Imagine paying a few percent more for the goods that you buy, and receive slightly less than what you had previously earned every month. Prices will increase as government subsidiaries disappear; those on welfare will be forced to rely on fewer resources for their daily survival as the government eases from the pyramid scale design to an actual depositing and reserving of the taxpayer’s funds, or perhaps even leave welfare to private organizations. We will suffer, that is certain. We face this onslaught of pain, however, for a cause we know to be true and worthwhile; our children and the generations beyond them. We shall carry on underneath the new burden of having to pay for our actions, so that our children can live free and follow their dreams without being pulled back by the steel ropes of our ‘gift’. It is a burden that we must absolve, regardless of the pain that it causes us. We teach to make up for our wrong, to bring justice to a world of chaos; what are we if we do not follow the very moral principles that we yearn towards? We must, for to do otherwise would be contradictory to ourselves.