trillion recognized federal government debt is one of the prime reasons why so many Americans, especially seniors, are having trouble making ends meet and why many of the young can't save.
What's happening is that since 2008, Washington has been aggressively engaged in a process called financial repression.
Financial repression is a deliberate policy by which deeply indebted governments, like ours, have historically used to discharge their otherwise unpayable debt. It's a combination of chronic inflation coupled with artificially imposed low interest rates. What this effectively does is transfer wealth from savers to government.
One of the beauties of financial repression from Washington's perspective is that it's complex enough that the average person doesn't understand how it works. This allows the government to keep taking vast sums of private wealth year after year without having to suffer any political consequences. That is, those in power stay in power.
Since the financial crisis of 2008, financial repression has been responsible for the yearly stealth transfer of hundreds of billions of dollars from the private sector to Washington.
The rationale is that it's better to take something from everyone to resolve the financial predicament which the government regards as a societal problem.
One of the negatives of this hidden tax is that the prudent saver is punished. Another drawback is that financial repression makes it very difficult for people to save and thus accumulate some wealth.
I have been following events since the 1970s, and one of the things that stand out for me is the cavalier and even reckless ways in which government spends money. No responsible person would ever run their household the way politicians have run the government. So now we're paying the piper for our collective spendthrift ways.
Peter Skurkiss, Stow