I noticed an economist I follow had a conference for those number-crunching geeks interested in the big picture on the U.S. and world economies. He called it the “Irrational Economic Summit.” At first, I thought that was a harsh title but upon further review, maybe not.
So much of what’s going on in our world is right in front of our eyes but we often miss what’s important because there’s so much information overload out there. Here are a couple of examples:
I received an email from a national non-profit organization in Washington, DC that promotes the establishment of bike trails. They want me to donate and tell my congressman to vote to maintain government funding of trails. Totally within their right to make this request. But out of curiosity I checked the annual report and tax filings on their web site, and here’s what I found:
- They spend about $800,000 a year in lobbying Congress to get $1.1 million in funding. They took in another $5.3 million in memberships and contributions. Their top 4 staffers bring home over $600,000 and their headquarters is in Washington – one of the most expensive real estate markets in the U.S. Most of the rest went to expenses but they have over $3 million squirreled away in cash and investments. They only gave out $1.8 million in grants for trails – supposedly their reason for existence.
- There are probably thousands of non-profits like this in America that want money from the U.S. government.
Now let’s look at our federal government’s situation (courtesy of www.usdebtclock.org). Our CURRENT U.S. debt is about $17 trillion dollars. Our infinite horizon future debt, according to the Federal Reserve –based on the projected costs of Medicare and Social Security alone– is $125 trillion dollars. That figures out nearly $400,000 PER CITIZEN and over $1 million PER TAXPAYER (only about 1/3 of the citizens are taxpayers…another issue for another day). The average assets PER CITIZEN are over $320,000, but of course that’s the average. Many citizens have far less than that. So the government’s future unfunded liabilities are more per citizen than each citizen is worth. You would think this fiasco will end badly someday.
Your financial health is up to YOU! Don’t expect Uncle Sam to be the answer. The antidote to this spending sickness should be personal saving, investing and living within your means. Personal responsibility and having a viable plan in case the economy turns sour again just makes sense. And that’s something we can help with.
Our federal government’s spending should scare us, but most citizens aren’t paying attention or they would not stand for this. It’s, well, irrational.
If you’d like some help working through some of these issues, or if you have questions, please don’t hesitate to reach out to us. We look forward to hearing from you!
HAPPY NEW YEAR!