The Cost Of Money

One would have to be living in a cave to not realize this country is spending too much, which in turn, means its debt is way too high. We have created a society with their hand always out.

Early in the morning, I try to watch one of the many business channels to see what is happening in business, and on these channels, I donʼt hear much about wars, politics or lawsuits – it is strictly about business.

A while back, a guest on a business show was talking about our country’s national debt and the effects it is going to have down the road if we don’t control it. 

He explained before the pandemic, the federal government was spending 20 percent of the country’s Gross Domestic Product (GDP), which is currently up to 25 percent. The guest on the show said if the federal government keeps spending at its current rate, the majority of our GDP will be used for paying debt in 2030. 

While this may be a slanted line now, he explained after 2030 the line would almost be vertical.

The GDP is one of the key indictors used to gauge the overall performance of a country’s economy, and it is a way to measure the market value of goods and services manufactured and sold during a specific period in a country. 

GDP can be determined in three ways, all of which should, theoretically, give the same result. They are the production – output or value added – approach, the income approach and the speculated expenditure approach. 

This individual expressed our government is “spending like drunken sailors.” 

We might not see too many drunken sailors in our region, but we get his drift.

The White House wants to spend trillions of dollars for programs that would mainly buy votes for the upcoming election, which I think is really wrong. Buying votes is the reason we have an open border with Mexico and declining debt on student loans.

If the government keeps doing this, soon all of our tax dollars will go toward paying for entitlements.

Experts say one thing that will help everyone is productivity of our economy – it has jumped 4.7 percent in the third quarter of this year. This was the largest increase since 2009, excluding 2020, when the pandemic created whiplash. 

Those in the know of the stock market say, “It conforms our view strong economic growth isn’t inflationary if it is driving productivity growth. This productivity, in which companies and their employees get more efficient, is important because it could keep the economy growing without driving prices higher.”

Many of us realize, especially those of us in agriculture, debt can be a tool to grow, but this debt can also drown us if it is not used for the right reasons. One has to have the right business plan to pay off debt and move forward. 

A bad plan will make for a nervous banker, which doesn’t help you in the future. 

Or current government doesn’t have much of a plan to service the debt, except to keep printing money and acting like drunken sailors.