It’s no secret that deficit spending is out of control and the U.S. national debt is heading for nosebleed levels. When Ronald Reagan was sworn in as president in January 1981, the U.S. debt-to-GDP ratio was 32%. When Donald Trump was sworn in as president in January 2017, that ratio had grown to 105%, the second highest level in U.S. history, second only to the level at the end of the Second World War.
At least the Second World War was an existential crisis and we not only won, but we emerged as the most powerful military and economic power in the history of the world. Over the 25-year period following the war, from 1946 to 1971, we managed the debt back down to a comfortable 30% ratio. It remained there until 1981 when it began to soar again.
This continued through Republican (Reagan, Bush 41, Bush 43) and Democratic (Clinton, Obama) administrations. It was a bipartisan disaster. Unlike 1945, we don’t have much to show for all of this debt. We are now a declining economic and military power relative to China.
Congress did try to deal with the deficit by imposing a “sequester” on military and domestic spending above certain levels, and by eliminating “earmarks,” which is a fancy name for pork barrel spending that does not meet any national priority, but is targeted to a particular congressional district to get votes for a member.
Guess what? As this article shows, in the face of a government shutdown and conflicts over spending for healthcare and the military, Congress has decided to bust the sequester and to bring back earmarks! This is not a partisan exercise. Democrats and Republican alike are in full agreement on spending more of your money and running up bigger deficits.
America is heading toward a global crisis of confidence in the dollar as it becomes clear that inflation is the only way out of this mess. Meanwhile, the mood in Washington is spend, spend, spend. What you should do to protect your wealth is buy gold, gold, gold.
It’s clear that good science does not support the extreme claims of the climate alarmists. Yes, there is such a thing as climate change, but it’s slow, difficult to predict and almost impossible to model because of the complexity of the process. The climate alarmists have grabbed most of the headlines for the past ten