We have a unique opportunity to witness the outcome of irresponsible Government that promotes a sense of entitlement, and this harsh lesson will continue to unfold all over the globe in the coming months and years. All we have to do is heed this lesson and change course before we suffer the same hardship. We are not too big or too important to avoid the same consequences, however, such attributes may provide additional time for us to make the necessary adjustments to sidestep much of the adversity. The worst case scenario is for us to continue down this same path of thinking that the problems in Greece and Europe are isolated, and that it will never occur here. In fact, it is already emerging in California and a host of other states that are in untenable situations which are expected to only get worse. Our attitude seems reminiscent of the recent mortgage market calamity; we would be hard-pressed to find anybody that thought the destruction would be sitting squarely on the doorstep of the Treasury as it steadily mowed through every level of the financial industry. It seemed impossible, yet there it sits for all of us to enjoy the losses for years to come. This tragedy alone almost brought us to our knees, how many more of these created disasters can we withstand? Our irresponsibility will find its reckoning in one form or another, either we can take corrective actions now and suffer the effects that will be painful yet manageable, or we can continue whistling by the graveyard thinking everything will somehow work itself out without any sacrifice. It is a fantasy to expect that decades of living above our means should continue unabated because of entitlement. Greece has just reluctantly become the canary in the coal mine regarding irresponsible Government for all that will listen and heed such warning.

Considering our Government’s propensity to spend on top of the huge deficit that already exists, it makes you wonder what the plan is to repay it. I think people in this country have always ignored the expansion of debt because it has never really affected their daily lives, but this indifference will soon change. We are arriving to the point that the world is not going to endlessly finance our excess, and it may well occur in the very near future as we bathe ourselves in more debt. Upon that occurrence, we are likely to see the true brilliance of our elected officials shine as they proceed to deal with a burden of their creation that has become overwhelming.

Reality will dictate that taxes will have to be raised universally which includes the Government’s recently popular targeted top 5% income earners and the middle class that believed a meaningful tax cut was forthcoming. It will also be inevitable that the printing of money will proceed unabated; this is because the realization will sink in that taxes alone can not cover this monstrous debt while still paying for current Governmental expenditures. Increased taxes and the further cheapening of our money by means of printing will be the Government’s answer to the mountain of debt amassed, and the continuation of spending after the creditors retreat. There are also other actions possible such as the reduction of Government spending which they demonstrate a lack of desire to address and have proven incapable of achieving. Also, simply reneging on the debt that has been accumulated is possible, but this would be too destructive thus not likely to occur unless it becomes the only option. It will prove more expedient to just print the money and deal with its consequences later on down the road.

Complicating the debt issue further will be the tidal wave of entitlement spending coming in the next 20 to 40 years with payments of Medicare, Medicaid, and Social Security. These entitlements are going to absolutely bury us if serious progress is not made on these programs soon. Every year that goes by without any meaningful change to them is continuing to eat into an ever larger share of the revenue collected. Plus it makes it more difficult to solve because we are losing the benefit of time.

With all the debt that we continue to foolishly accumulate along with the financial disaster coming our way with entitlements certainly provides sufficient doubt of America’s capacity to meet all of these obligations. Could our Government actually have disingenuous intentions regarding our National Debt? Maximizing the cash inflow as long as our creditors will continue to participate and then subsequently settling that debt with severely diminished dollars that were just printed, or even worse, not at all if a catastrophe results. Meanwhile, we continue down the same road of arrogance while our politicians are smiling and stating that America’s best days are ahead – Really? Maybe their lack of concern stems from being able to discount the problem with the knowledge of their planned deceitful response to it.