At the urging of some of my more hip-to-the-financial-news friends, I watched the movie I.O.U.S.A. last night (available on Netflix on-demand), which explains in an entertaining and informative way what the national debt is, why it matters, and why we’re so incredibly screwed.
I hope you like cat food. Because that’s all you’ll be able to afford to eat when we retire. The baby boomers are gonna clean us out, folks.
You know that Social Security money that gets taken out of your paycheck, Gen X and Gen Yers? You ain’t never gonna see it again. Look up “Ponzi Scheme” in Wikipedia. That’s how Social Security operates.
Here’s the problem in a nutshell: the U.S. government spends more than it earns (through taxes). That’s not a problem in the short-term, but it’s a big problem in the long-term. I won’t go into why, but let’s just say that other empires throughout history, among them Rome and England, were undone by their debt.
But you have to watch the movie to see why and just how hard we’re going to get our asses handed to us.
When I owned cats, I always thought that I would prefer Tender Vittles. The dry stuff looked like it would tear your mouth up worse than stale Cap’n Crunch, and the wet stuff was just plain gross. I hope they still make T.V. (I already have slang picked out) in 30 years.
Part of the problem is our government. If you’re an institution for the people by the people, when the people are addicted to debt, you’ve got a tricky situation.
No one wants to hear about cutting Social Security or Medicare, or on the other hand, raising taxes. We expect it all for nothing. We want big government benefits with small government taxes.
And the leaders running the country don’t have either the cojones or mojo to tell it like it is, and complex economic ideas need documentaries, not sound bytes, to be understood.
So what can we do? My suggestion is you invest what little nest egg you have left over from the recession and put it all into Nestlé, parent company of Purina. Because cat food is all you’ll be able to afford to feed yourself, and everyone will be buying it.
And if you live in Florida or New York City, make sure you buy some Ziplock bags. If you recall from Inconvenient Truth, we’ll be underwater and you won’t want your cat food to get wet.