U.S. consumerism unsustainable

Twenty years ago I was on a national television show. I expressed my concern about the ever growing federal government debt of $4.5 trillion. I raised a question then: What will happen when all money collected in taxes goes to interest on the national debt? I restated The Grace Commission report (1984), by 1996 we would be at the point of no return.

From then to now I have studied economics. The Grace Commission expectation was incorrect. The Federal Reserve and our government had a greater scheme than any individual could imagine. Expand speculative bubbles in the economy. Abolish Glass-Steagall law of 1933, drive interest rates ever lower, forever, so all persons can borrow more money. Speculative investing exploded in growth, resulting in the expansion of derivatives and leveraging. We have all seen the resulting bubbles. The tech bubble (1997-2001), The stock market bubble (2002) and then the housing bubble (2007-08). We are told it is part of the business cycle of the free market. But how can it be a free market if some private entity is controlling interest rates?

Our national debt marches towards $18 trillion. We are the largest debtor nation on the planet. Today, we have developed new bubbles in money, stock market, bond market and expanded our ever growing military conquest to the tune of $650 billion per year. More than 3 times what China spends and 6 times what Russia spends on their military. Interest rates continue at historic lows. Money is borrowed so the greatest consumers in the world may go into debt to purchase all the developing countries’ best products. And China’s economy has just surpassed the United States of America’s economy in terms of purchasing power according to the International Monetary Fund. Today, China’s national debt is what ours was in 1994.

Interest rates cannot be held down forever. According to Fortune magazine, in an October 8 article, NY Federal Reserve President William Dudley believes an increase in interest rate is “reasonable” by mid 2015. So I raise the same question from 1994: What will happen when all money collected in taxes goes to interest on our national debt? I will add one other question. How long will the developing world of 6 billion souls support our ever growing indebtedness for consumerism and military conquest? I know, I know, eat drink and be merry. We are the great United States of America. An Empire to last forever or at least a 1,000 years with our military might.