The Horse Sense Blog compares the nonsense in today's news with good ol' fashioned horse sense


“…I shall speak forth my sentiments freely and without reserve.… It is only in this way that we can hope to arrive at truth, and fulfill the great responsibility which we hold to God and our country. Should I keep back my opinions at such a time, through fear of giving offense, I should consider myself as guilty of treason towards my country, and of an act of disloyalty toward the Majesty of Heaven, which I revere above all earthly kings.” - Patrick Henry, March 23, 1775


"The further a society drifts from truth the more it will hate those who speak it." - George Orwell

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Sunday, February 16, 2014

We're In Way, Way, Way Over Our Heads


Here's the Nonsense:  America isn't really in such bad financial shape.  At least we're not like Detroit.

Here's the Horse Sense:  Compared to America's fiscal situation, Detroit is actually in much better shape.  Our future is doomed if we don't wake up to how bad things have really gotten.

It gets old hearing people talking about things the government needs to spend money on, let alone asking how the government is going to pay for things.  The fact is that our nation is broke and no one seems to care.  Not the politicians and not the citizens.  I warned in my book, No Tomorrows, that there were 3 core problems America faces that must be fixed to turn this country around.  So far, none of them are being addressed (not that anyone's listening to me, but the problems are obvious and should be dealt with just as a matter of common sense).  One of those problems that I discussed in that book was our debt.  And now it's even worse.  Contrary to the CBO's Extended Baseline Forecast a few months ago that showed our debt (including unfunded liabilities) at $47 trillion, their other set of books (they call them the Alternative Fiscal Scenario) show the U. S. at $205 trillion in debt.  

The Extended Baseline Forecast of the CBO assumes current law remains in place, with provisions of current law like cuts in Medicare and Medicaid doctor reimbursements, even though they usually change.  Even the CBO does not view these as realistic, but they give the public a better feeling about our fiscal situation.

The Alternative Fiscal Scenario forecast is what the CBO actually projects future taxes and spending to be.  They include in these projections consideration for how Washington (the President and Congress) have historically been changing the laws. Generally they are seen as much more accurate, but you and I rarely, if ever, hear anyone talk about these numbers.
When people talk about needing to spend money or being upset because something was cut from the budget in a showdown between the Democrats and Republicans the correct response should be, "No, we have no money, we are bankrupt FAR WORSE than Detroit!" ("Showdown" to the establishment GOP means they give up and let the Democrats have whatever they want -- as evidenced by the recent cave on the debt ceiling for which we can thank John Boehner and other Republican leaders.)

That's right, far worse than Detroit.  Think about it.  Detroit has $18.3 billion debt, which when divided by it's 701,000 population comes out to $26,105 per person.  The U. S., on the other hand, is $205 trillion in the hole.  Divided by our 317,000,000 population comes out to over $646,000 per person.  Hmmm….. seems like our politicians in Washington could learn something from Detroit (sarcasm intended).  

WIth the exception of a limited few, who in America can afford an additional $646,000 of debt on top of their lifetime expenses to live?  Imagine starting out your life with $646,000 hanging over your head before you've grown up, gone to school, or worked a day in your life.  Then add interest to that and all of the other expenses you'll have throughout your lifetime and you're doomed.

It's been reported that the average person with a bachelor's degree will earn about $1,550,000 over their lifetime compared to those with a high school diploma who will average $1,300,000.  

Let's say that you're the average person with a college degree and figure out what this means for you:  

We have to start by taking your share of the national debt from your lifetime earnings.  So, $1,550,000 - $646,000 = $904,000.

A conservative estimate of taxes would be 25%, which is $387,500 ($1,550,000 x 25%).  So, let's take those taxes away: $904,000 - $387,500 = $516,000.  

Average life expectancy in the U. S. as of 2013 is 76 for men and 81 for women.  Let's use the average male lifespan of 76 years.  

And let's assume that your parents support you until you're 26, since Obamacare allows you to stay on your parents insurance that long and that would mean you are still a child (hey, don't get offended at me for calling you a child until you're 26, I'm just using the government's definitions here).  

Based on that information, that means you have 50 years to support yourself (from age 26 to 76).  

Now, we need to take the $516,000 you have left and divide it by the 50 years you must support yourself.  So, dividing $516,000 by 50 years we are left with $10,330 per year to live for your entire adult life.  (Of course that doesn't deduct the amount you're responsible for of your state and city's debts.)

Now don't be too upset.  The good news here is that Obamacare will significantly shorten your lifespan so you won't have as long to live.That means you'll actually have a little more money to live on.

Oh wait, I forgot that the continual printing of money by the government (they call it quantitative easing so you don't think of them devaluing your dollars).  That means that your money will be worth less and less each year, too.

Think we're in trouble?  If you don't, then you're dumber than the 1 in 4 Americans who, it was just reported, don't know that the Earth revolves around the Sun.

Folks, we're in serious trouble. The future is very dark and getting worse each day we allow this to go on.  We need to replace as many of the Democrats and establishment GOP members of Congress as we can in this year's midterm elections.  My new book, The Leadership Secret, looks at what is required to be a true leader.  We're talking about the kind of leaders that America needs to get out of the mess we're in and turned back to the country we were designed to be.  The Leadership Secret shows the secret common denominator found in all true leaders and what their 16 common character traits are.  This describes the key for true leaders in all areas of life, whether it's government, business, family, or in service organizations.  

Electing the right kind of people in 2014 will give America another chance.  If you prefer to live on $10,330 per year, then continue to do nothing.  But is that the future you dreamed of for yourself, your children, and your grandchildren?