Terry Corbell, The Biz Coach
By Terry Corbell
Business Consultant

On 9/11, America’s Economic Preparedness Worse than Ever



Sept. 11, 2017-


The three biggest headlines in America today deal with gigantic tragedies.

  1. The destructive Hurricane Irma.
  2. The aftermath of Hurricane Harvey.
  3. The memory of 9/11 in which 2,996 Americans were killed, more than 6,000 injured, and $10 billion in property damage resulted from the series of four coordinated terrorist attacks by al-Qaeda, the Islamic terrorist group.

Unfortunately, today is the 16th anniversary of that tragic day, but one headline has been ignored by the media.

As the federal deficit officially hit $20 trillion today, America’s fiscal ability to deal with such crises is worse than ever.

In Sept.2001, the U.S. national debt was $5.8 trillion. George W. Bush had been in office as president just eight months. He inherited that massive debt from President Bill Clinton.

However, when Mr. Bush left the White House he handed over a $10 trillion national debt to his successor President Barack Obama.

From 2008 to 2016, the national debt exploded by 93 percent to $19.4 trillion as a result of President Obama’s policies.

President Trump has managed to slow the skyrocketing pace of the debt but  the U.S. Debt Clock rapidly ticks away every split second.

But President Trump – in facing dysfunctional Congressional Republicans who failed to pass reforms in taxes and the failing ObamaCare – was forced to cut a deal with Democrats to raise the debt ceiling for the next three months in order to fund relief of Hurricanes Harvey and Irma.

Not to quibble with relief and recovery efforts, but what America needs is economic patriotism. Unfortunately, what’s trending is fiscal dysfunction to tragic proportions.

U.S. bonds are more like pathetic junk bonds. America has a mushrooming welfare state and an imploding health-care system that are pushing America’s economic prospects into oblivion.

Interest payments and entitlements now devour more than 60 percent of the federal budget.

In just 10 years, the Congressional Budget Office forecasts the public debt will be unsustainable.

Trade deficit

On another front, drastic steps are needed to curb America’s trade deficit. The annual trade deficit is $500 billion.

Why? America engulfs more products than it produces and is selling too many private assets. Increasingly, foreigners are buying prime real estate, corporate debt and equities and U.S. government bonds.

While President Trump is correct to solve trade issues, he is attacked by the mainstream media and liberal pundits as being too nationalistic with his populist rhetoric.

While it was encouraging that the gross domestic product (GDP) tripled in Q2 of this year – a vast improvement over President Obama’s paltry 1 percent average in the years of his tenure – the rest of the world increasingly owns America.

IOUs

Publicly and privately, foreigners have $8.3 trillion in IOUs from the U.S.

The Trump Administration understands the significance of this alarming figure. It represents 45 percent of the GDP. Ouch!

Unless President Trump overcomes political opposition by Republicans and Democrats in Congress, the IOUs will be more than 60 percent in 2027.

Just look at Greece and other nations. In trying to solve their economic crises, none of them has survived economically without turmoil and massive political unrest from such problems. Ironically, such fiscal problems are unnecessary.

Temporarily, the foreign investments are rescuing America fiscally-speaking.

But it will not continue if foreign investors come to believe America will be unable to service its massive debt.

If foreigners stop buying U.S. treasuries, too many dollars in circulation will cause prices to spike and inflation will rear its ugly head.

Complacent leaders

Many economists and politicians – Democrats and Republicans, alike – are way too complacent.

Just because the dollar has long been much of the world’s reserve currency, the nation shouldn’t continue to print dollars that increasingly go to pay interest on the climbing debt.

Many Conservatives only want to debate tax cuts. Liberals refuse to consider entitlement reform and spending cuts and want to raise taxes.

If taxes are raised, the nation’s businesses would find taxation even more burdensome and will continue to transfer intellectual property and assets overseas.

This would defeat the Trump’s Administration’s goals to bring business profits home to America, and to increase GDP to 4 percent. As would more federal benefit programs.

The two key solutions: Economic growth and decreasing of entitlements. Short of these achievements, America will have another recession.

Two key measures have failed so far.

The Democrats in resisting President Trump for purely political reasons – and the Republicans lacking in discipline and inability to agree on replacing ObamaCare and tax reform – are most distressing.

A question of pride

So the only answer to economic preparedness is economic patriotism.

Unless politicians in Congress grow up and face economic realities, future Americans will be saddled with unfair, massive debt.

Don’t you think that’s a sad legacy?

From the Coach’s Corner, related information:

Governments – from Cities to Federal – Dangerously in Debt — The U.S. economy has been slowly mending. However, the situation is bleak for governments at all levels. Why? High debt is dangerous and economic growth is dreadfully slow. This is best illustrated by the enclosed U.S. Debt Clock.

Why President Trump’s Growth Budget, Reforms Matter — Deficit-spending and the resulting massive debt severely damages America’s economic prospects and hurts each American. But a disciplined approach will make America great again — by shrinking the national debt and implementing other needed reforms.

Economy: The High Public Price Tag of Manufacturing Jobs — Donald Trump’s election has prompted a surge in optimism for the economy and stock market, according to authoritative polls. But countless manufacturing workers and their families are on public assistance says a UC Berkeley study. The answers aren’t more entitlements or higher minimum wage. Here are the real solutions.

Avoiding Taxes, Apple’s Irish Strategy Apparently Backfires — The most nonsensical irony in corporate America involves Apple CEO Tim Cook’s tax strategy which has drawn fire from the European Commission. Why? It’s apparently backfiring, and is unpatriotic and shortsighted.

Ideas to Accelerate Slowest Economic Recovery in Decades — Most voters are likely to vote their pocketbooks. So for them the positive spin on the economy by Hillary Clinton and President Barack Obama doesn’t reflect reality.

“I don’t make jokes. I just watch the government and report the facts.”

-Will Rogers


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 




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Seattle business consultant Terry Corbell provides high-performance management services and strategies.