Why America Is Doomed to Debt

by Joe Plemon on November 22, 2010

Fixing the national debt is not about politics or economics; it is about human nature.

Some Deficit Reduction Ideas

As President Obama’s bi-partisan deficit reduction commission is nearing their December 1 deadline for a united attack on our federal deficit, numerous ideas are being considered.  This commission, along with a separate19-member group sponsored by the Bipartisan Policy Center, are suggesting such ideas as:

  • 6.5 percent national sales tax (not the Fair Tax)
  • One year Social Security payroll tax holiday
  • Raising Social Security pension age
  • Raising the income cap on who pays into Social Security
  • Cutting military spending
  • Dropping home mortgage interest and charitable contributions tax deductions in lieu of a refundable 15% tax credit

An Apt Description of the Debt Problem

Former Senator Pete V. Domenici of New Mexico, who was the senior Republican on the Senate Budget Committee for more than a quarter-century, correctly assesses the quandary, “This problem is so big, so obvious and yet so hard to solve. And it’s not going to be solved unless and until the leadership on both sides and the president decide that it is big enough to be considered a war.

With current national debt of $13.7 Trillion (see Real Time National Debt Clock) and projected national debt of $19.6 trillion by 2015, I agree with Domenici.  I am not a cynic or a pessimist, and I hope I am wrong, but, as I reiterate: this is about human nature.

What am I talking about? Human beings are basically self-centered.

This one attribute will kill efforts to put sanity into our federal deficit.  Why?  Three reasons:

1) We will transfer the problem.

Although no one knows how long we can corporately tread water, we will try to prolong the eventual collapse by tweaking the system instead of fixing it.  Worded differently, “We are going to protect our own generation even it we have to build a time bomb for future generations”  Self centered?  You bet.

2) We won’t sacrifice.

We want our national problem fixed, but won’t give an inch when our own special interests are threatened.  Some are already carping about the commission’s idea of raising Social Security age to 68 by 2050 and to 69 by 2075.  What?  This is a very minor adjustment for a broken system whose trust fund, according to our current administration, will be exhausted in 2037.  My point is that we want someone to make sacrifices as long as that someone isn’t us.  The unemployed don’t want unemployment compensation cut.  College students don’t want their Pell grants cut.  All entitlement recipients want to keep full funding flowing their way.  Reality is this: our current national debt is about $45,000 per citizen, or $124,000 per tax payer.  Does the word “unsustainable” fit?  If our nation is going to ever take on this monster, all Americans must expect to make sacrifices.  Being self centered won’t get the job done.

3)  Career politicians

Our decision makers have their own careers on the line.  I understand that making unpopular decisions – possibly career threatening decisions – is tough.  I am glad I am not in their shoes.  But then I remember: these are public servants.  The vows of their respective offices should challenge every Congressman and Senator to have the backbone to make decisions on one simple standard: “Do what is best for our nation.”  In a time of crisis, doing what is right means being willing to vote for sacrificial cuts even if their whiny constituents vote them out of office.  Making tough decisions goes with the territory.  Sadly, I am not confident our career politicians have that kind of character.  Protecting their own hind sides is simply another form of being self centered.

The cure for our nation’s woes, as former Senator Domenici aptly stated, “… is so big, so obvious and yet so hard to solve.”

I agree.  Either we sacrifice now, under our own terms, or Disaster will overtake us, under his terms.  The choice is ours.

Like I said, this is about human nature.

Readers:  Jump in with your thoughts.  Do you think there is any hope America will actually attack its national debt?  What would need to happen?  Is human nature the real culprit?  Am I over-reacting?


{ 16 comments… read them below or add one }

Tim @ Faith and Finance November 22, 2010 at 8:37 am

Your three points at the end were right on target. Who enjoys getting a smaller piece of the federal pie?!?! Not too many people are willing to take a cut and sacrifice – which is an unfortunate reality and harsh look into our selfish nature.

Check out this “Budget Puzzle” by the NYT. You can balance the budget yourself and see exactly who gets cut out of the budget.



retireby40 November 22, 2010 at 1:05 pm

We’ll have to make tough choices soon. The huge national debt is making me worry about my own investments. What can we do as an individual to protect our portfolio if the national debt keep rising? I’ll try to read up more on what happened in Ireland and Greece to see what kind of defensive strategy I can use.


Evan November 22, 2010 at 11:37 pm

4) We can’t pull out of 2 wars….


Carol@inthetrenches November 23, 2010 at 12:04 am

Excellent post. The source you cite from New Mexico is right on and that’s probably why he is a former senator. One thought that comes to mind is that it may be a good time for the government to consider selling some of it’s vast land holdings back to private parties (American only). I don’t know if that would be a good answer but maybe something that could be reviewed.

Everybody wants the debt cut as long as it’s not from their benefits or tax credits. So whatever is done someone will be angry. I do not believe that selling American debt or assets to foreign countries or businesses is the right answer. Countries can be taken over economically just as surely as with a gun but with less blood to clean up or protest until it’s too late.


joeplemon November 23, 2010 at 8:27 am

Thanks for the link on balancing the budget. It gives us an insight into what Congress is facing. But the problem with balancing the budget (while that would be a monumentally great accomplishment) is that it still doesn’t attack the debt (deficit).

Yes, the ballooning national debt is a concern to us all. Where will the money come from to pay off our government bonds? Print more? Bad solution, but could happen, creating more and more inflation and deflating our personal investments. Let me know what you learn from studying Ireland and Greece. I am interested in defensive strategies too.

Doing so would help reduce the national debt, but not come close to paying it off or even balancing the budget. Check out the link from Tim’s comment above.

Selling land holdings could be a help, but only a band-aid if spending is still out of control. Makes me think of a family who sells their house to pay off their debt, but never addresses the real reason for the debt.

And yes, owing substantial debt to foreign powers is scary. What will happen if we can’t pay? I suppose we will print more money and pay with inflated dollars. Bad for us all. Are government bonds considered unsecured loans? Would China want some land holdings instead of inflated dollars? These are questions I don’t have answers to, but I do know that our national debt makes our national future both fragile and insecure.


Invest It Wisely November 23, 2010 at 11:25 pm

What’s the next step beyond majoritarian democracy? Rule by a minority by a majority is no fun, but it seems we’ve simply replaced one form of rule with another… in a sense, we all steal from each other through the voting booth, and we all lose out as a result. Nobody wants to give up their individual entitlements, yet the fact that nobody is willing to do so is what is setting the system on a downwards spiral. How do we get off this road?


Steven and Debra November 24, 2010 at 2:32 pm

Joe, you did a great job of describing one of the most pressing problems of our current age. Thank you!

The problem, as you suggest, is seeded in our human nature. Is it possible that our views or perceptions of human nature also contribute to the less than desirable behaviors we see exhibited?

God created our human nature with the mechanism for survival built into our DNA. This innate instinct for survival is what gets us to scurry on across the railroad tracks when we hear the train whistle blowing. It is as instinctive as the reflex action in our knee when the doctor taps on it with his rubber mallet. Animals are also borne with this survival mechanism built into their genes. Most humans and animals will fight or will be very aggressive in their actions when cornered and left no other alternative for survival.

Many humans, however, seem quite willing to expand this innate mechanism for survival, or defense, to include offensive action against their neighbors. These offensive actions are often referred to as “preventative war” for the purpose of making them more palatable to those disinclined to such offensive activities. The only reason we mention this is because once we accept this type of aggression to be deployed against our foreign neighbors, around the globe, it is only a small leap to transfer a similar type of mindset against our domestic neighbors just down the street. The mindset may not be as drastic, on a global scale and militarily, as “kill-them-first-there-before-they-kill-us-here,” but it could be manifested, on a domestic scale and politically, by the mindset of “loot-them-first-before-they-loot-me.” Either mindset is not the way to achieve peace or prosperity.

The solution to these debt problems you’ve described won’t be found in the realm of our human nature but can only be found in the realm of our spiritual nature which allows us the wonderful opportunity of avoiding the potentially stern but equally just consequences (cause and effect) associated with the natural laws of the universe. If we, as a society, don’t rise above the level of the animal kingdom, by drawing from our spiritual nature, when we search out solutions to society’s ills, the society perishes or self-destructs.

Love is a natural law as compelling and as instructive as the law of gravity. There are inherent risks in violating either law. Violation of the natural law of gravity and the law of love result in consequences commensurate with the offense. Minor infractions of these two laws may, respectively, result in minor abrasions, bruises, or hurt feelings and impaired relationships. Major violations of these two laws can, respectively, result in physical or spiritual death.

It is no accident that the three greatest commandments, in the bible, involve love (Matthew 22:36-40). Two of these love commandments are spoken, the third one implied. We are to love God with all our heart, soul, and mind and our neighbor as ourselves. The implied commandment is that we are also to love ourselves. Self-destructive (unloving) behaviors, by individuals toward themselves, don’t show proper gratitude (love) to our Creator who has made us in his image. If we want to align ourselves with biblical teaching and the natural laws of the universe, we must love God and every human being, including ourselves, because we are all made in his image. It sounds easy but we fail at it miserably.

There is no clearer example of this self-destructive behavior than our political system. Its very essence of power is derived from sowing the seeds of social discord and division among people of all walks of life who, in reality, have much more common with one another than they’ve been led to believe. Absent this fabricated social discord and division, the political system collapses of its own weight. Absent this fanning of hatred, envy, and strife between various social classes and special interests, politicians become irrelevant.

There is no love in politics. We firmly believe that for every problem individuals and societies face, there can be no real solution absent love. If love is not an integral part of the solution, it is no solution at all but a continuance of the status quo and a continuance of the blame game and finger pointing.

An acquaintance of ours was a life-long Republican and deeply entrenched in conservative political activism until he started drawing Social Security benefits. As soon as he qualified for benefits he switched to the Democratic Party in the hopes of better protecting his benefits. This is a perfect example of the self-interest mechanism coming into play. This is the kind of loot-thy-neighbor-because-he-first-looted-me thinking that the political system has cultivated.

The lure of a free lunch is as old as the incident in the Garden of Eden when Eve was offered a free lunch. Politicians who offer similar such enticements should be avoided like the plague. Every time we vote for one of these snake-oil salesmen offering the elixir of a “free lunch” we have violated the three greatest commandments in the bible because we know there is no such thing as a free lunch. The lunch always costs someone and in many instances costs everyone. Just as there was a very dear cost to the “free lunch” Eve was offered, by Satan, there is also a very dear cost to the “free lunch” we are offered by politicians. In Eve’s case, she really wasn’t that interested in the nutrient value of eating the apple or satisfying a craving for hunger. What she really wanted was to elevate herself to being a god on a plane equal with God. Satan lied to her about the consequences of pursuing such action just like politicians do. Politicians promise to fulfill the desires of their supporters but hide from them the real costs or consequences to such promises. This is the stock and trade of politicians with few exceptions. The abeyance of consequences or the illusion of setting aside the natural law of cause and effect is what we mean when we use the term “free lunch.”

Left versus right politics plays upon our human nature of wanting something for nothing or the proverbial “free lunch.” Traditionally, we’ve had the two major parties repeatedly taking turns looting the opposing party’s constituency for either welfare or warfare spending. Now, it appears the two major political parties are doing both and have turned against their own constituencies. In our view, we have a one-party system of government masquerading as two.

The model for how this plays out, in the U.S., is the Euro Zone. They continually beat their chests and cry for austerity measures and then turn around and bail out each of the PIIGS (Portugal, Italy, Ireland, and Spain) one-by-one. Politicians in the Euro Zone are no different than politicians here. Politicians are more in touch with their human nature than their spiritual nature and therefore have a great propensity to do what is in their own self-interest (getting re-elected) than doing what is in their citizen’s best interest or treating (loving) their neighbor as themselves. If politicians were to do the right thing and voted for necessary austerity measures, they would be voting themselves right out of office. Politics has institutionalized the concept of theft as being moral and has created an entire society believing that political government is something akin to the Divine and that voting, as a means to loot their neighbor, is acceptable behavior.

Once the drama is played out with the PIIGS, in the Euro Zone, we believe it will drift to Britain and then on to the United States. It will most likely begin with either California or New Jersey being the first to default on its debt. After a lot of political posturing and threats of austerity measures, each of the 40 or so bankrupt states will probably be bailed out at the expense of the federal taxpayer, all consumers, all holders of U.S. dollars, and all holders of U.S. debt (sorry for repeating ourselves in the last two examples).

One of the largest holders of U.S. debt, if not the largest, is China. Since China is somewhat pegging their currency to the U.S. dollar they are effectively manipulating their currency (the Yuan) to the same degree the United States is manipulating the dollar. The Chinese are doing this to protect their export market which is in their self-interest. If they allow the Yuan to rise too rapidly, their exports become more expensive to overseas purchasers. Chinese leaders are advising their citizenry to purchase gold and silver as a form of insurance to hedge against such manipulation and a possible global currency war. It is probably pretty good advice for all of us to follow.

Many countries, in addition to China, will most likely devalue their currencies to keep pace with the dollar devaluation. In essence, Ben Bernanke declared World War III with the latest QE announcement. We are now in a global currency war that will have each major world currency racing each other to the bottom. The better alternative currencies will be those countries that are rich in natural resources. The currencies of the resource rich countries may also spiral to the bottom, but their crash will be cushioned somewhat by those currencies which arrived there first.

Joe, to sum it up…we are blessed with a human nature that warns us when people or situations are threatening our very survival, but we are also blessed with a spiritual nature with which we can achieve more loving solutions than the ones we commonly resort to globally and domestically.


Invest It Wisely November 24, 2010 at 6:01 pm

Well said! I personally am not a very religious person, but I can see the logic and wisdom in everything that you said. That was a very thoughtful and interesting comment.


Steven and Debra November 26, 2010 at 11:52 am


Thank you for the compliment and kind words. We appreciate it!


joeplemon November 26, 2010 at 3:45 pm

Steven and Debra (and Kevin)
I agree with Kevin. Thank you so much for your well thought out comment. My post spelled out why our nation is doomed to debt: human nature. I did not suggest any solutions because I don’t believe we, as a people, will seek, find and allow our spiritual natures to trump our human natures. Yes, there will be pockets of those who are willing to sacrifice individual rights for the good of the whole, but those pockets are all to rare and small to turn the huge momentum our nation has toward debt and more debt. Like I said, I am not a cynic or a pessimist. I hope I am wrong. But I don’t think I am.

I do believe that as we spiral downward, Christians will be given opportunities as never before to reach out to those who lose not only all they have, but their hope as well.


MelodyO November 30, 2010 at 10:10 am

I couldn’t agree with you more, but I can’t say I blame people for feeling this way. I live in Alberta, Canada and back in the ’80s we were drowning in debt. We voted in an extremely popular politician who convinced us that huge cuts in services were the only way to pay off our massive debt, and that our sacrifice was necessary to make it work.

So we all put on a stiff upper lip as he blew up hospitals (no, really) and laid off workers and cut to the bone, and lo! The debt was vanquished. And then he retired and the next politician got in and spent us right back into debt again. It was all for nothing. I can certainly understand why people demand to get their piece of the pie, because they’ve seen for themselves that if they give up their piece, it’s not going to go to orphans and the homeless – it’s going to politicians and civil servants feeding at the public trough.

PS I really enjoy your blog – keep up the good work! :0)


joeplemon November 30, 2010 at 11:44 am

I am amazed that a politician who had the gumption to make huge cuts in services was popular. I would certainly respect such leadership, but I have trouble believing that such a politician in USA today would be well received…too many people are too dependent on the services that would be cut. I hope I am wrong.

Too bad that the politicians who came behind the guy with backbone undid those accomplishments…such actions produce great cynicism. It is no wonder, as you say, that the people resist huge cuts: trust has been broken.

Thanks for being a reader!


Financial Samurai December 4, 2010 at 3:02 am

There’s no hope, but debt isn’t so bad so long as someone else pays for it. And frankly, everybody else will, hence there is no incentive to reduce debt!

PS Joe, we are doing an ad campaign for your bills.com mortgage widget. Check the pricing for details in the forums and let me know in an e-mail how yours compares. I think you may be able to renegotiate after your contract is done if there is a difference.



Laura Langan February 27, 2011 at 5:09 pm

There was only a quick mention of cutting our military. I think that “cause” is overfunded. It is time we stop police-ing the world and start police-ing ourselves. It is a crime that we are looking at such a grime reality and future but spend so much money to “helping” and “liberating” allegedly “third world” countries. The reality of it is: We are a third world country.


Joan C July 18, 2011 at 6:20 am

Some day, perhaps soon, our paper money will be worthless. I have been stocking up on canned food for about a year now, before a can of soup costs $10 if you can get it.
You are correct, the problem is human nature.
When the national debt is 100% of GDP, there is no way we can pay it back.


joeplemon July 19, 2011 at 5:09 pm

Joan C,
We are also stocking up on canned goods. We also bought enough seed kits (which don’t have genetically altered seeds) to plant two acres of vegetables. We hope we don’t have to become totally self sufficient, but this will be a small investment if we ever need it.


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