It’s easy to focus on big, looming threats. Our nation’s aging infrastructure could result in a power grid failure or a widespread breakdown in the water supply system. A massive solar flare could hit the earth and leave us without a functioning power grid. A pandemic outbreak of the bird flu could cause millions of deaths.
But sometimes what we need to be paying attention to is the slow-moving disaster. Like the federal deficit.
Since the 2008 recession, the federal government has made some pretty generous promises to a lot of different segments of American society. But without massive tax increases, the money to make good on those promises simply isn’t there.
This puts us in an uncomfortable situation. The government can keep spending money it doesn’t have, which will eventually wreck the dollar and lead to a financial crisis. Or it can cut way back on entitlement programs, which could trigger a social meltdown.
At the rate we’re going now, the federal government will be spending 22% more annually than the national gross domestic product by the year 2040. And that’s 15 points worse than the numbers were a year ago.
We’re not on a good financial trajectory, folks. It’s time to reduce your personal debt as much as possible and to diversify your investments, including keeping some physical gold and silver coins in your home, just in case you need them for purchasing power in the future.