The national debt encompasses every level of government borrowing and spending and currently is at approximately $14 trillion; it is the largest debt in the world and is so huge and so out of control that it can never be paid off. The national debt is literally the biggest threat to the security of the United States of America as well as the rest of the civilized world. It is a very real danger to entire world, it effects every decision of our leaders, investors and citizens; knowingly or unknowingly. The national debt will continue to cause the US Dollar to weaken which will in turn cause the US government to raise interest rates which have been held extremely low for a considerable period of time and cannot go any lower.
Surprisingly the government recently actually agreed to lower the national debt by roughly $ 1 trillion, but also raised the debt ceiling (the amount they can borrow) at the same time. So much for setting a positive example for the world.
Unemployment rate — The number of unemployed workers expressed as a percentage of the labor force. Unemployment is one of the most devastating things that can happen to you in American society. High unemployment means employers aren’t under much pressure to pay their workers more, in most cases employers will demand longer work hours for less pay. Unemployment and underemployment continue to cause hardships for millions of families and weigh heavily on the confidence of the nation. The combination of the high unemployment and high interest rates will be tragic for a great many people. Instead of having to pay the interest obligations on our national debt we could be using the money much more productively such as creating millions of jobs through infrastructure design and construction.
Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. Inflation is often described as the creation of new money and has a significant effect on investment returns, decisions and monetary policy. Inflation by its very nature creates a debt-based economy, destroys savings, and makes retirement next-to-impossible. As inflation rises, every dollar will buy a smaller percentage of a goods and services. Inflation is currently about 10% and the actual unemployment rate is roughly 20% not the official 2-3% and 9-10% respectively, as officially reported.
The national debt is also a driving force behind the raising of the interest rate.
Two major factors of supply and demand causes real estate values to go down: overbuilding and tight money, both of which are currently in place. Since the beginning of 2007, real estate values in many parts of the country have declined anywhere from 30% to 50 %, due to the so called real estate bubble bursting. Currently people are unable to afford houses due unemployment and strict loan terms; and should probably wait for the foreclosed surplus to hit the market anyway.
In summary, we have briefly looked at the leading factors that have stemmed from the national debt and will in both the short and long term will have a dramatic impact on the quality life for people around the world; we are just starting to see the impact now. As these factors continue and the effects begin to feed off of each, what we will see; unfortunately will be an economic perfect storm resulting in the largest transfer of wealth in the history of the world! The middle class lifestyle which has been under attack for at least the last decade will continue and speed up leaving most people either wealthy or poor.
Unfortunately things probably will get worse before they get better; however there could be a silver or even gold lining in the clouds on the economic horizon for you personally by taking preparation now. There are several precautions that you can take to alleviate the national debt and ensure you are out of debt yourself and secure your position on the correct side of the wealth transfer. You should definitely become more self reliant by starting your own business. You could start out part time in an area of your passion to protect against job loss and/or inflation. Get your investments in order. Holding a large percentage of conservative investments won’t cut it any longer as they won’t keep pace with rate of inflation, look to be a little more aggressive; especially within the technology and commodities market. Hold off from buying a house in the short term and opt instead to rent while waiting to find the real bottom in the real estate market.