There have been 58 National Emergencies called since the National Emergencies Act was passed in 1975. President Carter was the first President to call one over freezing Iran’s assets here in the U.S. He could’ve gone through Congress but didn’t want to wait. It’s still in place to this day. As a matter of fact, 31 declared national emergencies are still in place. Congress is supposed to meet annually to discuss the outstanding national emergencies to clear the books, but I researched it and they don’t.
Most of the time, the presidents who have used the emergency claim did it for no true national emergencies. President Obama issued 12 including one to block the property of persons threatening peace, security, and stability in Yemen. Why would that be a national emergency? Not unlike Executive Orders, U.S. Presidents have used the National Emergencies Act to work around the stalemate of our Legislative Branch and for political fodder to show they stand for one issue or another. Trump’s call for a national emergency will of course be challenged and I don’t have a clue how it will end up, but what I am sure of, is that politicians love having yet another issue to distract us over.
I believe we do have a national emergency on our southern border, but it doesn’t come close to the real danger our country is facing and neither political party is touching it because it would be political suicide, and that is our national debt which has now gone over $22 trillion. I call it political suicide because if our legislators did what needs to be done to save our country from going bankrupt, most of them would never be re-elected. These legislators are more concerned about the votes here and now than what the future holds. By the way, the federal government will default on its loans, even an amateur economist can figure this out, it’s just a matter of when. I think the greatest problem we face in fixing the problem, or in slowing the bleed, is that most Americans don’t understand what will happen to our country, along with countries around the world, when the U.S. defaults on our loans. If we don't understand how it will impact us on a persona level, then it's quite frankly a non-issue, Our naiveté is exactly what politicians want.
Our currency is accepted in most places around the world and some countries don’t even have their own currency, they use the U.S. dollar instead. Even Russia has a stockpile of U.S. dollars to conduct business with other countries. In all, there’s around $580 billion dollars of our currency floating around the world on any given day. A decline in the value of the U.S. dollar, would be devastating to a lot of the world at this point.
Our impact on the world's success is one of the tools in Trump’s arsenal in trying to achieve better trade agreements. We produce over $21 trillion dollars (GDP), in goods and services and we have around 23% of the world’s wealth. We have the greatest spending power in the world by far, followed by China, Japan, Germany, Britain, and France. Japan is an amazing success story in output considering how small their country is, but now they too are encountering a serious debt problem. The bottom line is more and more countries want us to succeed because it drives their economies as well. We are a more important customer to China than they are to us, so he’s using this leverage to improve tariffs and get more money back into our economy.
So many things begin to unravel when the U.S. exceeds its credit limit and must pay off existing loans, so I can’t cover them all, but hopefully I can provide a decent picture of some of the things we’ll be facing. When our dollar is devalued, we lose purchasing power not only here, but around the world. For example, if you travelled to another country, you might end up only getting 75 cents on the dollar in an exchange rate so the trip would cost you 25% more than it otherwise would’ve cost. The question is would you still travel and if you and other people in the same boat don’t, what impact will that have on places around the world who depend on tourism such France and Italy? When they lose money in their economy would they buy fewer goods from the U.S. and other countries? It’s a vicious cycle because we’re a global economy and one country’s pain can have a ripple effect and with a country our size in economic strength, the ripple is more like a big wave.
If the U.S. began defaulting on its loans, we’d be busy trying to negotiate repayment terms with other countries. Our government would be trying to negotiate new terms on various financial instruments that U.S. citizens and foreign investors had invested in such as bonds and treasury bills. Interests rates on all business and personal loans would increase. How much would the prices for goods and services need to increase so that businesses could afford higher interest rates on their business loans? Just like with our federal government, the easiest way for most businesses to quickly increase cash flow is to downsize employees. It’s a scary situation when a business must raise prices knowing they’ll lose some customers but hope they retain enough to stay in business.
With a limited money supply, the U.S. couldn’t offer the low interests loans they are now so inevitably the car and housing industry would take a huge hit which means our economy will as well. We’ve been through a little bit of this before and it was horrific. Was the problem fixed, no, our legislators raised the debt ceiling (credit line), so they could continue to borrow money and pump it back into the economy. If I were given a $5,000 increase in my credit line it doesn’t mean I made $5,000 more dollars that year, eventually I’d have to pay that money back with interests. But governments cook the books with borrowed cash and make it appear that things are going well. They kick the can down the road and hope with the mentality of musical chairs, that they won’t be left standing when the music stops because then they’ll lose their power and influence.
This is very much like if I were to be in the hole financially, making bad decisions, and instead of restructuring my lifestyle to fix the problem, I get my credit line increased. Inevitably two things will happen. I’d run out of creditors because I’d no longer be a good risk, and I’d end up with creditors calling me to get their money back and I’d probably need to file for bankruptcy because I couldn’t do it. The money I was spending in my world for goods and services would no longer be available so eventually people working at the businesses I did business with, would feel the pinch. I'm just one person, what if hundreds, or even thousands in my community, took a hit on discretionary income? I promise you that businesses who are more in the "wants" business than the "needs" business, will feel most of the pain.
The quickest way for the federal government to begin paying off loans is to get rid of non-essential employees and default on government contracts because they would save billions of dollars in payroll and the impact of this would only take weeks. Many social programs would take huge hits because socialism only exist with capitalism. The federal government will be concerned about pulling our country out of a financial meltdown, so they’ll no longer have the discretionary income they’ve had in the past. Many workers in these fields would lose their jobs at a time when the people who need their help, will increase.
We pay over $500 billion dollars a year in interests alone. Not only is $500 billion dollars leaving our country annually, but we’re also paying principal on those loans; not enough as we’re going further and further in debt, but trillions of dollars leave our economy. This money was borrowed, it wasn’t ours. The federal government uses this borrowed money to prop up our economy thus making people feel secure, but it isn’t real. As creditors look at what’s happening in the U.S. with economic growth compared to debt acceleration, they’ll either choose to invest their money elsewhere or make it more expensive to do business with them through various means such as charging higher interest’s rates on investment capital or forcing our government to offer better investment yields on U.S. financial instruments. This once again would just push the problem down the road.
If you’ve ever studied political lobbying, you know how desperately these politicians want to keep their seats in the House and Senate. It’s why neither Party allows legislation regarding term limits to go on the floor for a vote. They love their jobs. Most of them are treated like royalty. They don’t want to lose these jobs by forcing massive tax cuts in the federal government that would inevitably impact their constituents and thus their re-election hopes. They know for a fact, that their constituents are going to be horrendously impacted when the federal government starts defaulting on loans, but each political party will do their best to blame it on the other in hopes of maintaining their jobs. It’s how they operate.
They know most Americans can’t envision the federal government crashing and burning through loan defaults. They know most Americans don’t have a clue about how badly it will impact their lives. The fact is, many people in the business of politics, laugh about their ability to manipulate the uneducated voter; Jonathon Gruber gave us insight into this when Democrats pushed the Affordable Care Act through. He specifically said they knew they could manipulate voters because in his words: “They’re stupid.”
The bottom line is both parties are perfectly fine with a fight over Trump’s National Emergency Declaration because it along with countless other crises both legitimate and manufactured, helps keeps our attention from the greatest crisis of all and that is our national debt. They’re all like The Great Oz behind the curtain trying to distract everyone’s attention from the truth. The very people who are supposed to be looking out for us, are instead looking out for themselves.
Is there anything more dangerous to our livelihoods? Can domestic terrorists ruin our world worse than what our legislators are doing? Are the people crossing our borders illegally, going to take our country down more effectively than our representatives are doing with our national debt? Of course they want everyone’s attention on what Trump’s doing. Of course, they’re going to attempt to divide our country through whatever means possible such as economic status, gender, race, sexual orientation, etc., even when they know, there aren’t systemic problems with any of these issues. They want our focus anywhere but our debt and the repercussions of their horrendous decisions towards our economic stability.
Our focus on these divisions will immediately go away when our federal government defaults on its loans. We’ll be more concerned about our own lives so social issues will have little meaning. Nothing takes away the ability to help your citizens like running the economy into the ground. If Democrats really care about the “disenfranchised,” they’d care about our fiscal stability. If Republicans really care about the state of our union, they should care about our fiscal stability. I believe they care but they’ve chosen Part over country. What’s even scarier is that even though we’re in the hole over $22 trillion dollars, policies being introduced by some members of the Democrat Party would bury us in massive debt. This isn’t speculation on my part. Our representatives have chosen the power and influence of being a legislator in D.C., over addressing the greatest national emergency we now face.
Please do me a favor. It’s very easy to find the legislators for your district if you don’t know already. This link (https://www.govtrack.us/congress/members), can get you there and you can easily comment on their webpage. Ask them a couple of simple questions and make sure they get back to you within a few weeks or call their office if they don’t; please don't let them slide. Here are the questions: 1) What would happen if the U.S. defaulted on its loans? 2) What specifically are you doing to address our debt?
They owe us a response to our questions. Put them to work. I very much appreciate your assistance in helping me hold our representatives accountable for their actions or lack thereof. Both parties want to distract us from the greatest national emergency we're now facing. We're in trouble; there's absolutely no doubt about it. Future generations don't deserve the mess our representatives are going to leave them with and they don't deserve for us to stand idly by thinking the mess will take care of itself because it won't. It's time to engage. It's time to fight the good fight. From President J.F.K. - "If not us, who? If not now, when?" In the last words heard from one of the heroes on United Airlines Flight 93, Todd Beamer, right before they went after the hijackers so they couldn't use the plane to crash into The White House: "Let's roll!"