The U.S. national debt has grown at an alarming rate since 20 years ago. Recently, the U.S. National Debt Clock ran out of space and had to replace its dollar sign with the number one in order to display the $10.2 trillion owed.

Our current economic situation results from loan defaults. The government using the same defective method of financing – borrowing more than they can pay – seems odd.

Up until the 1930s, tangible resources, primarily gold at Fort Knox, backed the Federal Reserve. Currently the global economy is based on debt.

The general public may not be too concerned because the government owes this debt. However, the government’s debt falls on taxpayers.

Each person in this country owes about $33,500, if $10.2 trillion is divided by 305 million people.

According to a report on the U.S. Census Bureau’s Web site, the average real household income between the years of 2006 and 2007 was $53,233. When these statistics are considered, paying the national debt seems futile.

People should ask if debt caused this current economic crisis.

“This [economic crisis] has come from a combination of people saving too little and the government borrowing too much,” said economics professor Carl Campbell. “As our debt builds up to other countries, our children and grandchildren will be the ones who suffer.”

If this circular flow of owing money continues, the value of resources will diminish. The global
economy can suffer and gain from this international system of debt.

A country can find strength in another country’s economy. However, a country’s suffering economy can cause the reverse effect.

Because the U.S. economy has suffered, other countries have taken a hit as well. A CNN article indicated that when the U.S. market fell 778 points, the markets of Japan, South Korea, Australia, England and Russia also decreased in various amounts.

Thomas Jefferson said, “to preserve our independence, we must not let our rulers load us with perpetual debt.”

While countries once used money to represent value, it is now used to represent borrowed assets. And the effect is felt through inflation.

Although countries are too deep within this system of borrowing and owing, people can still find value in money by doing precisely what professor Campbell suggested.

Save it.

The more we spend on products that are attractive rather than useful, the more we devalue our resources with labels and trends. Assessing true value can be achieved only by avoiding frivolous spending.

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