National debt is on the minds of taxpayers, financiers, and government leaders across the world. World debt is currently more than $53.4 trillion at the time of this writing. The amount of debt is $17.4 trillion in the United States alone. Our work puts us in contact with people in more than three dozen countries, and we see daily how the concern regarding sovereign debt in the United States and elsewhere seems to transcend differences in culture and language. Can the world continue to add debt with economic and financial license? Strangely, some people—including some Keynesian-minded economists and government leaders—believe the answer is yes.
But these people are wrong. And their mistaken belief could lead to the suffering of millions of U.S. citizens and millions more around the world.
The financial threat is real and it is growing. Fortunately, some forward-thinking governments are meeting the problem head on and working toward real solutions. These countries, including countries such as Canada, Australia, and Mexico, will be the winners in the 2020s and beyond. Others, including the United States, are moving in the wrong direction—that is, simply continuing to incur debt. As a result, we will be experiencing the painful results of today's inability to solve the problem.
This chapter discusses both the relative winners and the absolute losers. It's critical to note that there are only relative winners, ...