It's Crash and Burn Time for America's Economy

Everyone knows the alarming statistics…

The United States government is more than $34 trillion in debt and, if interest rates continue at their current levels, the annual interest payments on our national debt will soon eclipse the annual spending on our national defense.

Let that sink in for a minute or two…

Meanwhile, last year’s federal deficit stood at $1.7 trillion or 6.3% of our Gross Domestic Product (GDP). Those are historically high numbers and unless Congress acts swiftly to reverse course by getting spending under control, Uncle Sam is about to drive over a financial cliff… and to take us with him.

Equally troubling is the fact that consumer credit card debt has risen by 47% over the past three years as Americans “pull out the plastic” to deal with soaring inflation under Joe Biden. Things have gotten so bad that the average American, if faced with an unexpected $600 bill, would crash and burn financially. To make matters worse, 60% of Americans – including those earning $100,000 per year or more – report living paycheck to paycheck.

Whereas there is little that John Q. Public can do about the rising national debt or Congress spending like a bunch of drunken sailors other than voting the worst offenders out of office, there is actually a lot we can do as individuals to rein in personal debt.

My solution? Start living within your means.

I know that is easier said than done but, then again, not really. All it takes is a modicum of self-discipline and for people to realize that there is a distinct difference between wants and needs. People need a roof over their head, food on their table, and clothes on their back… and not much more than that. OK, gas in their car and money put away for a family vacation and a rainy day.

The problem is that as our incomes rise, so does our standard of living. We get a raise at work and so, we buy a new car and a bigger house. Instead of camping with our kids, we book an expensive cruise or the requisite trip to Disney World… staying on property, of course.

Did you know that the average NBA player earns $9.7 million per year to put a round ball into a round hoop. Not exactly rocket science… or something that intrinsically benefits society such as educators, medical professionals, and first responders. And yet, 65% of all NBA players go broke within five years of retiring.

Why is that? Simply put, far too many professional athletes act – and spend – as if they are going to play forever. They forget that Father Time is undefeated and that sooner rather than later, a younger and faster player will take their place.

Rainy days are inevitable. Pipes break, dishwashers go on the fritz, and kids get sick. Add in a major car repair or an unexpected illness and soon, we are bleeding money that we don’t have. With our backs to the wall, we turn to VISA, Mastercard, AMEX, and Discover to bail us out in the short-term… at interest rates that have climbed from 12.9% in 2013 to 24.66% today according to Lending Tree (and 27.9% according to Forbes).

In 2022, Americans paid an astonishing and astronomical $105 billion in interest to credit card companies. In case you’re wondering, that is an all-time record and one we shouldn’t be proud of.

Is it really possible to live within – or better yet, below – one’s means and still be happy? Let me ask someone who knows: me!

Thanks to my financially responsible wife, we have managed to live on one income for most of our married life… and a minister’s salary at that. Our kids were never deprived of the basic necessities of life and we took multiple family vacations each year to campgrounds throughout the MidAtlantic States. They all played sports ($), two of them attended a private Christian high school ($$), and all three earned college degrees ($$$).

During their growing up years, we moved from a small Cape Cod to a larger split-level house back to a different Cape Cod. When we relocated from New Jersey to Florida in 2011, we bought a 3/2 home and then, after our kids got married and moved out, we downsized to a 2/2. Today, Deanna and I live well below our means in a 34-foot trailer with all the amenities that our previous homes had… minus the property taxes, property insurance, and constant maintenance.

Admittedly, brick and mortar homes are the best way to build equity, wealth, and financial independence, and we did that for the first 35 years of our marriage. However, at this stage of our lives, all Deanna and I want to concentrate on is family and ministry. We have watched far too many people spend half their lives accumulating "things" and then spend the rest of their lives maintaining the things they acquired.

No, thank you! That's why when we downsized to our luxurious Jayco Jayflight trailer, we sold or gave away all of our nonessentials. The last thing we wanted was to pay for a storage unit (or two) to hoard things we didn't need, want, or use.

At age 64, I realize that my “rainy days” will happen with increasing frequency and so, I want to be prepared for when they do. If only I could talk Uncle Sam into becoming a full-time RVer - or at least downsizing to a condo or a townhouse - we might be able to eliminate the deficit and start paying down the debt.

The bottom line is if Deanna and I can do it, anybody can... even Uncle Sam!