..In Afghanistan, three American soldiers were disposing of various damaged and unusable religious materials at NATO’S Bagram Air Force Base north of Kabul. Included in the items they were burning in the base’s burn pit, were several copies of the Koran. These were Korans that the American government had purchased to provide free of charge to the jihadist prisoners held on the base. However, several of these books were damaged and some had been used by prisoners to pass messages and information, so the authorities decided to discard them.

When some Afghans who are employed by the U.S. government as workers on the base discovered that copies of the Koran were being burned, they pulled some of the unburned pages from the ashes and made a beeline for their friends. From there, word quickly spread that the Americans were desecrating the Holy Koran. Of course, the Taliban and al-Qaeda were only too happy to help spread the word and fan the flames, so to speak.

Before long, rioting spread across Afghanistan and the Persian Gulf region. Over the next several days, supposedly “loyal” Afghans turned on their American counterparts and killed them. As of today, six American soldiers are dead. The overall death toll now stands at about 40.

So the Obama Administration quickly got its act together and issued an… apology. In fact, several apologies. The President, the Defense Secretary, the American general leading the coalition forces all apologized. Obama by letter to the treacherous Afghan president Hamid Karzai, the others by television. The President even promised to “hold accountable those responsible.”

So, how is that going to work? Unless something is buried deep in the Obamacare bill that former Speaker Pelosi hasn’t discovered yet, I don’t believe U.S. law forbids the burning of a Koran. On the other hand, some observers say that Afghan law may require the death penalty for desecration by a non-Muslim. American service members are governed by the Uniform Code of Military Justice (UCMJ), which is predicated on U.S. laws. Afghan law in this case could be translated “Sharia” law.

One can guess that this is going to be quite a headache for President Obama. Should he hand our soldiers over to the Afghanis to be tried in a Sharia court? That would be a sticky wicket for a government that screams about the “wall of separation” between church and state at every opportunity. That would also imply that he honors Sharia law above our own. Or, should he insist on whatever “discipline” — if any — that might be called for under the UCMJ. Keeping in mind, of course, that in America you can burn a Bible, a stack of Bibles, a cross, a flag, even a bra!

However, the thing that I find interesting is that the President can dash off a personal apology to an entire country and require his top military people to do the same over the proper (by the way) disposal of some already-desecrated Korans. Yet, all he and the State Department can manage are tepid press statements scolding Iran for sentencing a Christian to die for choosing, as a teenager, Jesus Christ over Mohammed. We should not be apologizing to Afghanistan and Karzai. We should be demanding that Karzai bring to justice those who have taken the lives of six Americans and dozens of Afghans. And, we should be demanding that Iran release Pastor Nadarkhani or suffer the outrage of America and the West.

By early February, the national average for a gallon of regular unleaded was $3.56. That’s not the highest it’s ever been, but gasoline prices have never been this high this early in the season. It’s interesting, too, that demand for gasoline is also at record levels — record LOWS and falling! According to MasterCard, demand fell by 3.1% in recent days and is 5% below last year. And even though Europe has had a brutal winter, this has been a rather mild one for the US. Yet, heating fuel prices have not fallen despite the fact that Americans used far less heating oil than expected this year.

Some observers credit the fact that Saudi Arabia has cut production by more than 250,000 barrels per day. Also, Iran decided to punish Europe for threatening to impose fuel sanctions. The Iranians announced they will stop sending more than 300,000 barrels per day to France, England, and Germany.

So, there seems to be no easy answer to the most popular question these days, “Why?” Why are fuel prices rising when demand is falling?

And, it appears the Obama administration is not going to take advantage of a golden opportunity to drive those prices down, put tens of thousands to work, and decrease our dependence on Arab oil.

Canada has more oil reserves than Saudi Arabia. Because of new technologies not available just a few years ago, Canada has been able to begin successfully recovering that crude oil. The Canadians announced that they wanted to sell that oil to their neighbors to the south. That’s us! So the private sector got busy and in 2005 began developing and building a pipeline that would move Canadian crude from northeastern Alberta province to refineries throughout the Midwest and on down to the Gulf Coast states.

Talk about a bonanza! The mammoth pipeline project is privately funded. No government stimulus funds needed. It will employ tens of thousands in construction-related jobs and maybe hundreds of thousands in related industries as the project grows and the oil is finally pumping. And there’s so much oil available, it will help make us less dependent on Arab oil. And it will help drive down the refined prices because, currently, Saudi oil is selling for $105 a barrel while Canadian oil is going for $33 per barrel. Some analysts speculate that within a few years, by combining our reserves with Canada’s, America could become a net oil exporter. We could sell oil to fuel-hungry China and maybe get some of our money back!

Sounds like a no-brainer, right? Wrong! Remember, we are now living in a “progressive” society. There’s no such thing as a “no-brainer” anymore. You see, our President is either so ideologically bound or so financially beholden to the environmentalist lobby that he feels obligated to do its bidding. So, on January 18, President Obama announced he was rejecting the Keystone XL pipeline project.

You see, he first tried to “postpone” his final decision until 2013 so he wouldn’t have to antagonize the environmentalists going into the 2012 general elections. Congress would have none of that, though. So they passed legislation requiring him to make a decision within 60 days or formally reject the project.

Then, President Obama complained that his government didn’t have time to do an effective environmental survey. That excuse brazenly ignored the fact that his own State Department had already issued an environmental impact study in 2010 that gave the project the environmental “green light.” So, the so-called “smartest President” in American history caved to the far Left and said “no” to a “no-brainer.” Even many in his own party are outraged.

Canada had already declared that they intended to sell the oil. If not to their closest neighbors (that’s us), then to someone else. It is now late February and the Canadians have already begun signing agreements with the Chinese to build the pipeline to Canada’s west coast and begin shipping the crude to China.
For a more complete discussion on this issue, please play the video below.  (This story begins at 10-minutes into the video).

“…as I watch our economy continue to convulse beneath an increasing tax burden, a smothering national debt, and stifling new administrative regulations, I marvel at how deep the deception runs. Though we think of our nation as the land of entrepreneurship, capitalism, and free markets, there’s nothing “free” about it today. Our entire financial system is owned and controlled, lock, stock, and barrel, by a shadowy, private, global financial cabal. Its front in America is The Federal Reserve System. Texas governor Rick Perry thinks the Fed’s actions may be “treasonous.” I think he may be on to something.”

Did you know that President John F. Kennedy was killed 10 days after stating that he would investigate the Federal Reserve?  See this and more in “The Hal Lindsey Report” of October 7, 2011.

PA President Mahmoud Abbas wants the United Nations to formally recognize Palestine as an independent state with borders based on a UN resolution passed 64 years ago! It’s a resolution the Jews accepted back in 1947, but the Arabs rejected!

Abbas has been adamant in his determination to submit a formal request to the Security Council. The PA says it will also ask the General Assembly to extend recognition. That will be a slam dunk there, since the majority of nations are Muslim or Muslim-sympathetic. Observers expect about 130 of the 191 members will vote in favor of the Palestinian state.

Of course, the GA carries no legal weight. Only Security Council votes bear the authority of international law. But recognition by the General Assembly will still complicate things immeasurably for Israel. The US has announced it will veto the request at the Security Council and President Obama essentially confirmed that in his speech to the UN on Wednesday.

But whether or not the Palestinian Authority actually carries through with its threat at this session, all of this just goes to show that the world is growing ever closer to forcing Israel to accept a failed terrorist state within its borders. The events of the last few weeks illustrate perfectly what the ancient prophets predicted: in the last days the entire world will line up against Israel.

Israel’s legitimacy as a modern nation is rooted in the same League of Nations actions, taken decades earlier, that provide legitimacy for Syria, Iraq, Lebanon, Kuwait, and other Arab nations in the Middle East…. The bottom line is if those nations are legitimate, then so is Israel. If Israel has no legitimacy as a nation, then neither do the other nations of the Middle East. You can’t have it both ways.

~President Barack Obama    READ ENTIRE TEXT

Andrew Jackson foresaw the fraud in 1832, exposed it, and an attempt was then made to kill him. Later, Abraham Lincoln, James Garfield, and John F. Kennedy all attempted to expose the money cartel that “runs” U.S. economy, and all were assassinated.

The international banking families who control the privately-owned Federal Reserve System, have robbed America blind for much of its history. And every time an American President has attempted to stop or confront those sinister forces, tragedy occurs.

Please watch the video to see how one of America’s most dominant institutions is affecting us all and the future of every person on planet earth.

[QE2 is] the program the Federal Reserve Board announced the day after the mid-term elections in which the Fed intends to print up between $600 billion and $1 trillion to buy US Treasury bills over the next 6 months.  In short, the Fed is going to create money out of nothing to buy our own debt that nobody else wants.  You know, a little like you paying off your mortgage with your American Express card.  Experts predict that this lunacy will further devalue the US dollar by as much as 20%.

The Germans are especially angry.  And with cause.  They still remember the experience of the Weimar Republic. After World War One, the Germans tried to pay off their debts by simply printing more paper money.  In 1914, 100,000 Marks meant a comfortable retirement.  By 1919 — just five years later — it wouldn’t buy a loaf of bread.  It reminds me of the song Larry Norman recorded back in 1970.  It was called, “I Wish We’d All Been Ready.”  It described the conditions that would occur in the days just before the Rapture and afterward.  One line says, “Children died, the days grew cold, a piece of bread would buy a bag of gold.  I wish we’d all been ready.”

Is that what we’re facing soon?

I believe the answer to that question is “Yes!” Even just a few short years ago, the prospect of the United States of America facing total financial collapse was laughable.  Today, it’s not only a possibility, it’s a probability.  In fact, John Allison IV, the former CEO of BB&T, the nation’s tenth largest bank, says it is “a mathematical certainty.”  In fact, I believe it’s possible that the current administration is trying to force this collapse so that our nation can be merged into a new global order.  I’ve discussed that extensively on past programs.  No matter what the reason, though, it’s coming.  And probably coming sooner rather than later.

Last May, the Department of Homeland Security issued a memo that contained information from a “proven credible confidential source” in Mexico. The intel described a new operation by several Mexican drug cartels in which they were sending a team of snipers into the United States to use lethal force against bandits who were robbing their drug smugglers.

The DHS memo also noted that the cartels had “23 scout locations with rolling encryption” along a route in southern Arizona known as the Vekol Valley. That smuggling route extends from Mexico northward across Interstate 8 to Phoenix. The area has gotten so dangerous that the Bureau of Land Management has posted signs along the US Interstate 8 highway warning American travelers of the danger from alien and drug smugglers.

However, a news organization recently got hold of the memo and published it. When asked, Pinal County Sheriff Paul Babeu confirmed that the DHS has sent the memo to his office along with many others in southern Arizona. Apparently, the Department of Homeland Security then realized that its own memo confirming the seriousness of the situation along the border could be quite embarrassing to the Administration, which denies that there is a crisis along the border with Mexico. So DHS disavowed the memo. But too many people had copies of it, so the Department’s spokesman then announced that the “information proved to be inaccurate.” He also said that the DHS didn’t have any “specific, credible information on intra-cartel violence taking place in Arizona.” I suppose he overlooked the fact that Phoenix is now the Kidnap Capital of America and almost all of it is “intra-cartel violence taking place in Arizona.”

Further, every other piece of information contained in the DHS memo has proven accurate, so why not believe the most important part? It makes me want to ask DHS Secretary Janet Napolitano, “Were you lying then or are you lying now?”
…
[EDITOR’S NOTE- Shouldn’t Homeland Security PROTECT us from the threat rather than tell us to avoid it?]

America is facing a threat that is beginning to take its toll. It’s a little like the growth of a deadly mold in your home. You never know it’s there until you begin to feel its effects in your body. And it can be lethal. If you don’t attack it with resolve, it might kill you. … That describes the insidious enemy we’re facing today here in the United States. “Political Correctness” the paralyzing fear of what others may think. It prevents us from acting in our own best interest.

On this week’s edition of “The Hal Lindsey Report,” I’ll discuss four recent stories that perfectly illustrate this immense danger facing America. The suffocating paralysis induced by political correctness opens the door to our own self-destruction, especially when confronting the threat posed by radical Islam.

Is it already too late? The Bible describes this condition very explicitly in the prophets’ discussion of the last days. Friends, America is in crisis. We can no longer just treat the symptoms, we must deal with the infection itself. It will be painful, exasperating, and perhaps frightening, but we must eliminate this insidious killer before it irreversibly cripples us. I do believe, however, that the Bible offers a remedy. Please watch the Hal Lindsey Report here.

Hong Kong contrarian economist Marc Faber warns in his Doom, Boom & Gloom Report: “The future will be a total disaster, with a collapse of our capitalistic system as we know it today.”  No, not just another meltdown, another bear-market recession like the one recently triggered by Wall Street’s too-greedy-to-fail banks. Faber is warning that the entire system of capitalism will collapse. Get it? The engine driving the great “American Economic Empire” for 233 years will collapse, a total disaster, a destiny we created.

Please read the article Death of ‘Soul of Capitalism’: Bogle, Faber, Moore

where you will find 20 indicators of the demise and recommendations to downsize your lifestyle expectations, trust no one, not even media.  Faber is uncertain about timing, we are not. There is a high probability of a crisis and collapse by 2012. The “Great Depression 2” is dead ahead. Unfortunately, there’s absolutely nothing you can do to hide from this unfolding reality or prevent the rush of the historical imperative.

Lord Monckton also addresses the underlying issue of the UNCC treaty, which makes the assumption that man can change the global climate.  The question “Can he?” is answered in the presentation.

Here is an excerpt from Lord Monckton’s Presentation..

“Here is why the truth matters. It was all very well for jesting Pilate to ask that question and then not to tarry for an answer. But that question that he asked, “what is the truth?” is the question which underlies every question and in the end it is the only question that really matters. When you ask that question what you are really asking is “what is the truth about the matter?” And we are now going to see why it matters morally, socially, and politically, as well as economically and scientifically. That the truth, the whole truth and nothing but the truth should inform public policy on this question.”

Hal Lindsey says this (Dec. 11, 2009)..

“I believe that what we are now witnessing in “Hopenhagen” is perhaps the most concrete step toward a one-world bureaucratic regime in recent history. And it could reduce some of the world’s most prosperous nations to the level of third world countries.

To give our President some bargaining clout in Copenhagen, the Environmental Protection Agency this week declared ‘greenhouse gases,’ most notably carbon dioxide, a public health hazard. This allows the EPA to regulate it — read that ‘tax it’ and ‘outlaw it’ — under the Clean Air Act. The Supreme Court had ruled that the Administration had to go back to Congress for that authority. No longer. This declaration by the EPA, just in time for Copenhagen, is almost a criminal circumvention of the Constitution.

Lord Monckton’s complete presentation (1-hr, 35-min)

The Conclusion of Lord Monkton’s Presentation (under 4-min, 10-sec)

The Presentation Slides (7.32 MB)

The UN’s Conference on Climate Change got underway this week in Copenhagen, Denmark. With thousands of delegates from most of the world’s nations and more than 100 heads of state due to make appearances, this conclave has a sense of urgency about it not even seen at the opening of the United Nations.

The ‘Climategate’ scandal seems to have added fuel to the fire. The conference organizers realize they have to ram their agenda through before it’s too late. Even the conference president acknowledged this in her opening remarks. Connie Hedegaard, former Danish Climate and Energy Minister, said, “This is our chance. If we miss it, it could take years before we got a new and better one. If we ever do.” That sounds a lot like US Secretary of State Hillary Clinton announcing at the European Union that our government was taking advantage of the global economic crisis to ram home massive changes under the guise of responding to the emergency. She actually said, “Never waste a good crisis.”

If the Administration gets its way, we’ll see massive increases in the cost of all fossil fuel energy. It’s an open secret that the government wants the price of gasoline to hit $8.00 per gallon. That, in turn, will drive the price of everything that requires energy, including manufacturing, agriculture, transportation, heating and cooling, through the roof. Copenhagen is all about controlling the world’s energy sources, then being able to dictate how that energy will be distributed — and taxed. Many strategically-placed individuals (Al Gore and George Soros come to mind), government officials (too long a list here), political parties (take a guess), corporations (GE is leading the pack), and science institutions and universities (as well as the scientists who receive huge government grants for coming up with the goods) will grow massively wealthy as a result. But, trust me, none of it will filter down to you and me. In fact, we’ll be the ones paying the new taxes to enrich these parties and many of the ‘underdeveloped’ countries in the world.

You know, it’s ironic that some of the underdeveloped nations in Africa that depend on income from their oil sales will be hurt by the drive to eliminate fossil fuels as an energy source. I suppose that’s why the ‘developed’ countries will be expected to replace that lost income. It’s sort of like the Obama Administration demanding that Israel freeze settlement construction in the West Bank. A freeze puts thousands of Palestinians out of work in the construction business. Come to think of it, the Administration’s policies will do the same thing right here in America. At least they’re consistent!

I believe that what we are now witnessing in “Hopenhagen” is perhaps the most concrete step toward a one-world bureaucratic regime in recent history. And it could reduce some of the world’s most prosperous nations to the level of third world countries.

To give our President some bargaining clout in Copenhagen, the Environmental Protection Agency this week declared ‘greenhouse gases,’ most notably carbon dioxide, a public health hazard. This allows the EPA to regulate it — read that ‘tax it’ and ‘outlaw it’ — under the Clean Air Act. The Supreme Court had ruled that the Administration had to go back to Congress for that authority. No longer. This declaration by the EPA, just in time for Copenhagen, is almost a criminal circumvention of the Constitution. The Agency has already begun developing permit requirements for ‘carbon dioxide pollution.’ And I’m sure those permits will cost a pretty penny.

Oh, yeah. Just in case you don’t know, carbon dioxide is what we humans breathe out. Plants breathe it in and make oxygen. So I guess that means we’ll now be taxing air!  [And,..] Copenhagen may fit into the drive to a one-world government foretold by the Bible prophets.

–>  Have a look at his thoughtful commentary here.

N. Y. Times: Fannie Mae Eases Credit to Aid Mortgage Lending[PDF 150KB]

According to this article, the risk, which played out in 2008, was known then; but, hey, the economy was OK so why not take alittle risk?

Written by Kerby Anderson

Let me begin with a provocative question: Is America going broke? It is a question that has been asked many times before. And when an economist asks the question, it creates quite a stir. Back in 2006, Laurence Kotlikoff asked: “Is the United States Bankrupt?”{1} He concluded that countries can go broke and that the United States is going broke due to future obligations to Social Security and Medicare. At the time, his commentary generated lots of discussion and controversy.

Two years later that same economist writing for Forbes magazine asked the question in a slightly different way: “Is the U.S. Going Broke?”{2} He pointed out that the federal government’s takeover of Fannie Mae and Freddie Mac represented a major financial challenge. These two institutions issue about half of the mortgages in America, so that part of the bailout put the government on the hook for $5 trillion (if you consider the corporate debtthat is owed and the mortgage debt that is guaranteed).

But $5 trillion is effectively pocket change when you consider the real liabilities that are facing our government. He estimates that is on the order of $70 trillion. I have seen others estimate our unfunded liabilities at anywhere from $50 trillion to as high as more than $90 trillion. Let’s for the sake of discussion use the $70 trillion figure.

The $70 trillion figure actually represents the fiscal difference between the government’s projected spending obligations and all its projected tax receipts. He notes, “This fiscal gap takes into account Uncle Sam’s need to service official debt-outstanding U.S. government bonds. But it also recognizes all our government’s unofficial debts, including its obligation to the soon-to-be-retired baby boomers to pay their Social Security and Medicare benefits.”{3}

When we are talking about such large dollar amounts, it is hard to put this in perspective. Let’s focus on the challenge that the baby boom generation creates. There are approximately 78 million baby boomers who will be retiring over the next few decades. Each of them can expect to receive approximately $50,000 each year (in today’s dollars) during their retirement. OK, so let’s multiply 78 million by a $50,000 annual payment and you get an annual cost of $4 trillion per year.

Of course, these are just the obligations we know about. There are others potential costs and obligations that aren’t even calculated into the national debt. Housing prices certainly fit into that category. We know some of the obligations that were written into law but cannot predict what might take place in the future. And we don’t know how many banks in the future will fail and what that cost might be to the American taxpayer.

So in this article we will take the time to count the cost and answer the question, Is America going broke?

Fannie Mae and Freddie Mac

I would imagine that if you asked most people a year ago what they know about Fannie Mae and Freddie Mac they would probably respond that they know very little about these two corporations. But after congressional debates about various bailouts, most Americans know a lot more about these two institutions.

Fannie Mae is the Federal National Mortgage Association, and Freddie Mac is the Federal Home Loan Mortgage Corporation. They are stockholder-owned corporations and referred to as government sponsored enterprises, known as GSEs. The two of them are considered the largest financial companies in the world with liabilities of approximately $5 trillion.

The bailout of these insitutions has been controversial for a few reasons. First, these two GSEs are private companies which the government wants to help with taxpayer money. Economist John Lott believes “this whole approach is pretty dubious. If you subsidize risk, you get more of it. If you don’t have to bear the cost of the risk, why not shoot for the moon?”

Former House Majority Leader Dick Armey says we are “privatizing gains while socializing losses.” Stockholders of Fannie Mae and Freddie Mac already receive higher interest rates than Treasury securities because of higher risk of repayment. He suggests that the government repay 90 cents on the dollar rather than 100 percent.

In the midst of the debates about bailouts, we learned some vital lessons about the economy. For example, some have talked about the proposal to suspend the accounting rules of the Sarbanes-Oxley Act known as “mark to market.” Trying to understand this proposal forced us to get up-to-speed on economics and accounting.

We also learned that sometimes a regulatory agency may not have done a good job warning us of dangers. The Office of Federal Housing Enterprise Oversight employs 200 people to oversee Fannie Mae and Freddie Mac which are the government-sponsored entitles that own or guarantee nearly half of the nation’s residential mortgages. Just a few months before the collapse of Fannie and Freddie, the OFHEO issued a report that saw clear sailing ahead.

We also learned that in trying to do some good, government can do harm. During the 1990s the Treasury Department changed the lending rules for the Community Reinvestment Act. This was an attempt to get middle-income and low-income families into homes. Unfortunately, these families lacked the resources to make their payments. It was only a matter of time before many of those families defaulted on their loans.

Now that the government is on the hook for these corporations, it increased the liabilities we are adding up in this article.

Medicare

Usually when we talk about unfunded liabilities, the conversation usually turns to Social Security. It turns out that the Social Security shortfall is a problem, but it pales in comparison to the shortfall for Medicare.

Medicare is a pay-as-you-go program. Although some members of Congress warned about future problems with the system, most politicians simply ignored the potential for a massive shortfall. Medicare comes in three parts. Medicare Part A covers hospital stays, Medicare B covers doctor visits, and Medicare D was recently added as a drug benefit.

How big is the financial shortfall? Let me quote from a speech given Richard Fisher (President and Chief Executive Officer, Federal Reserve Bank of Dallas). He says:

The infinite-horizon present discounted value of the unfunded liability for Medicare A is $34.4 trillion. The unfunded liability of Medicare B is an additional $34 trillion. The shortfall for Medicare D adds another $17.2 trillion. The total? If you wanted to cover the unfunded liability of all three programs today, you would be stuck with an $85.6 trillion bill. That is more than six times as large as the bill for Social Security. It is more than six times the annual output of the entire U.S. economy.{4}

There are a number of factors that contribute to this enormous problem. First, there are the demographic realities that are also affecting Social Security. From 1946 to 1964 we had a baby boom followed by a baby bust. Never has such a large cohort been dependent on such a small cohort to fund their entitlement programs. Second, there is longevity. People are living longer lives than ever before. Third, the cost of medical treatment and technology is increasing. We have better drugs and more sophisticated machines, but these all cost money. Finally, we have a new entitlement (the prescription drug program) that is an unfunded liability that is one-third greater than all of Social Security.

Richard Fisher says that if you add the unfunded liabilities from Medicare and Social Security, you come up with a figure that is nearly $100 trillion. “Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent and Social Security the remaining 14 percent.”{5}

So what does this mean to each of us? We currently have a population over 300 million. If we divide the unfunded liability by the number of people in America, the per-person payment would come to $330,000. Put another way, this would be a bill to a family of four for $1.3 million. That is over 25 times the average household’s income.

Consumer Debt

Up to this point we’ve been answering the question, Is America Going Broke? But now I would like to shift the focus and ask a related question. Are Americans going broke? While government debt has been exploding, so has consumer debt.

Let’s look at just a few recent statistics. Nearly half of all American families spend more than they earn each year. Personal bankruptcies are at an all-time high and increasing. It is estimated that consumers owe more than $2 trillion.

It is important to remember that although many Americans are significantly in debt, many others are not. In my earlier article on “Debt and Credit,” I pointed out how some of the statistics about credit card debt are misleading.{6}

The current statistics say that the average U.S. household has more than $9,000 in credit card debt. We also read that the average household also spends more than $1,300 a year in interest payments. While these numbers are true, they are also misleading. The average debt per American household with at least one credit card is $9,000. But nearly one-fourth of Americans don”t even own credit cards.

We should also remember that more than thirty percent of American households pay off their most recent credit cards bills in full. So actually a majority of Americans owe nothing to credit card companies. Of the households that do owe money on credit cards, the median balance was $2,200. Only about 1 in 12 American households owe more than $9,000 on credit cards.

The statistic is true but very misleading. That is also true of many other consumer debt statistics. For example, nearly two-thirds of consumer borrowing involves what is called “non-revolving” debt such as automobile loans. Anyone who has ever taken out a car loan realizes that he or she is borrowing money from the bank for a depreciating asset. But it is an asset that usually has some resale value (unlike a meal or a vacation purchased with a credit card).

But even in this case, the reality is different than perception. Yes, many families have car payments. But many other families do not have a car payment and owe nothing to the bank. So we have to be careful in how we evaluate various statistics about consumer debt.

The bottom line, however, is that government, families, and individuals are spending more than they have. Government is going broke. Families and individuals are going broke. We need to apply biblical principles to the subject of debt.

Biblical Perspective

Proverbs 22:7 says, “The rich rule over the poor, and the borrower is a servant to the lender.” When you borrow money and put yourself in debt, you put yourself in a situation where the lender has significant influence over the debtor. This is true whether the debtor is an individual or an entire nation.

Many of the Proverbs also warn about the potential danger of debt (Proverbs 1:13-15; 17:18; 22:26-27; 27:13). While this does not mean that we can never be in debt, it does warn us about its dangers. It is never wise to go into debt, and many are now wondering if America and individual Americans are going broke.

Romans 13:8 says, “Owe nothing to anyone.” This passage seems to indicate that we should quickly pay off our debts. That would imply that Christians have a duty to pay their taxes and pay off their debts.

But what should we do if government continues to get further and further in debt? I believe that we should hold government officials responsible since it appears that they do not have any real desire to pay off its debt. Psalm 37:21 says, “The wicked borrows and does not pay back.” We should repay our debts as individuals, and government should pay its debts as well.

In the Old Testament, debt was often connected to slavery. Isn’t it interesting that both debts and slavery were cancelled in the year of Jubilee? It is also worth noting that sometimes people even put themselves in slavery because of debt (Deuteronomy 15:2, 12).

Since we live in the New Testament age, we do not have a year of Jubilee, but we need to hold government and ourselves accountable for debt. If we see a problem, we should address it immediately. Proverbs 22:3 says, “The prudent sees the evil and hides himself, but the naïve go on, and are punished for it.” It is time for prudent people to take an honest appraisal of our financial circumstances.

When government is in debt this much, it really has only three options. It can raise taxes. It can borrow the money. Or it can print the money. While it is likely that government will raise taxes in the future, there does seem to be an upper limit (at least politically) to raising taxes. Borrowing is an option, but it is also unlikely that the U.S. government can borrow too much more from investors and other countries. That would suggest that the Federal Reserve will print more money, and so our money will be worth less.

In this article we have given you an honest appraisal of where we are as a country. The responsibility is now in our hands to hold government accountable and to take the necessary steps in our own financial circumstances.

Notes

1. Laurence Kotlikoff, “Is the United States Bankrupt?” Federal Reserve Bank of St. Louis Review, July/August 2006, 88(4), pp. 235-49, research.stlouisfed.org/publications/review/06/07/Kotlikoff.pdf.
2. Laurence Kotlikoff, “Is the U.S. Going Broke?” Forbes, September 29, 2008, www.forbes.com/business/forbes/2008/0929/034.html.
3. Ibid.
4. Richard W. Fisher, “Storms on the Horizon,” remarks before the Commonwealth Club of California (San Francisco, CA, May 28, 2008), www.dallasfed.org/news/speeches/fisher/2008/fs080528.cfm.
5. Ibid.
6. Kerby Anderson, “Debt and Credit,” http://tinyurl.com/6ocap8 .

© 2008 Probe Ministries