Today’s Daily Reckoning – Welcome to Squanderville

“… We recognize that we have a big debt to the generations that went before us—their sacrifices have helped ma[ke] us what we are … and made the country what it is. They saved. They invented. They built. What we see around us is mostly the result of their hard work … and many years of saving. If our ancestors had used up everything they produced, there would have been nothing left behind. But they didn’t. They left us their inventions and their constructions. They left us money, too. In the post-WWI period up until the mid-‘1980s, America was the world’s biggest creditor. More people owed more money to Americans than to any other nation. Public finances were occasionally stretched—such as during WWII itself—but from the founding of the republic almost until the Reagan years, each federal administration generally tried to leave the government cash till in about the same state it found it.”
“But in the space of a single generation, that huge legacy of capital and custom has been squandered. Now, the United States is the world’s greatest debtor—by a huge margin. Every year, it spends approximately 6% more than it earns. Its leaders have abandoned the virtuous practices of our ancestors. They no longer even pay them the homage of hypocrisy; they don’t even pretend to balance the budget, and the latest tally reported in these reckonings put the total unfunded liability at $61 trillion. This has effectively bankrupted the average family. It also turns every new baby in the U.S.A. into a major debtor—with more than $100,000 worth of unpaid bills—on the day he is born.”