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I’ve spent much of the last several years warning people about the “End of America”…
I’ve shown my readers what is about to happen and tried to convince them to take precautions before it’s too late.
But let’s face it … my work is mostly for wealthy people who mainly want to continue to be wealthy. So I’ve focused on how to prepare for these changes from the perspective of an investor – someone whose primary goal is to earn a return on his capital. I had precious little to offer regular wage-earners.
But the real danger right now is mostly to the middle class in America.
Americans owe more money, collectively, than ever before in our history – far, far, far more.
We owe at every level: $17 trillion at the federal level, $13 trillion in mortgages, another trillion in student loans, and nearly $3 trillion in state and local government debt. Put all of these numbers together and you end up with a $60 trillion pile of obligations. That’s nearly four years’ worth of our entire country’s total production.
To make sense of the numbers, just take a bunch of the zeroes away. Put these facts into a storyline that’s become all too common in America. Our economy is like a tattooed thug living in Detroit. In between burning broken-down cars and selling crack, he makes $16,000 a year working “security” at a local nightclub. Outside of busting heads, he has no real skills.
And why would he want to work hard to acquire them? Thanks to his public school education, he is convinced other people have a moral obligation to provide for him… especially rich people. They will give him health care, a clean apartment, a phone, etc. In his worldview, that’s what’s fair.
And if they won’t? He’s got no qualms about firing first and taking what he needs. After all, they owe him. For now though, he’s doing great.
The Korean grocer up the street gave him a credit account. In only a few short years, he’s run up a $60,000 tab. What are the chances he’s going to drastically cut his expenses, work hard to get a promotion, and find a way to repay these debts? Zero. What are the chances he ends up knocking over the Korean grocer and teaching him something about life in America?
You may object to my metaphor. But believe me, it’s far more accurate than most people are comfortable talking about. We live in a country that’s coming apart at the seams – financially, culturally, morally, and spiritually. The reason is simple. We have collectively become addicted to living way, way beyond our means.
My favorite example about how absurd our debts have become? The state of New Jersey still owes $110 million for a football stadium (Giants Stadium) that was demolished in 2010. It won’t retire this debt until 2025.
Similar debts exist on defunct or torn-down stadiums in Houston, Kansas City, Memphis, Seattle, and Pittsburgh. These stadiums are physical reminders of the absurd promises the government has made to its citizens.
On top of the debt it now owes, our federal government has promised its citizens $124 trillion of additional benefits. That’s not only more money than we could ever finance with tax revenues, but it’s considerably more money than all of the privately owned assets in the United States (roughly $99 trillion).
Keeping this lie alive… the lie that we can afford our debts (or even our defunct stadiums)… has become the most important national goal. That’s why everything stops when Federal Reserve Chairman Ben Bernanke speaks. Our obsession with Fed policy statements is the best proof I have that we’re far more concerned with maintaining “The Great Lie” than we are at actually building a better real economy.
Have you ever told a big lie? Did you ever exaggerate something to hide a weakness or insecurity? Or maybe you lied to cover a big mistake you’d made. Did you get away with it? Or did maintaining the lie suddenly consume all of your attention and energy?
Seemingly forgotten in our obsession to maintain the fiction of our solvency are the huge costs of lying, running our country on Asian loans, and keeping the printing press churning. Nobody notices that the purchasing power of the dollar is down by almost 50 percent in the last 10 years… or that real wages have been falling since the early 1970s… or that almost half of the able-bodied men in our country no longer work. Nobody mentions that most of the students at most of the urban schools in our country either don’t graduate or can’t achieve test scores above minimum standards. Sooner or later, the consequences of our lies will fall upon us.
Your taxes are going up. The number of people you will be forced to support (those on disability, food stamps, or Medicare… retirees… people living in war-torn countries…) is soaring. And your ability to pay for these benefits is being destroyed by global competition and the decline of the dollar. America is promising everyone more. And you’re the person who will have to pay.
Make no mistake… Every time the president says only “the rich” will pay taxes, just imagine he’s saying “you.” That’s far closer to the truth.
So… what can you do if you’re already struggling to maintain your standard of living? How can you hope to maintain your lifestyle as your wages collapse and the rate of economic growth slows or even reverses?
I believe your best alternative is to find a way to build your own business. Nothing good is going to happen for you in your life unless you make it happen. This is a harsh but important reality.
As an entrepreneur, I’ve gotten used to this fact. But for most people, it is an impossible hurdle. Most people can contrive an infinite number of reasons why they can’t do something for themselves. I used to think it was impossible to coach people past this inertia. But…
I’m reading a book that has changed my mind. It’s called “Choose Yourself,” by James Altucher. I believe this book will become a true classic. Anyone who reads it and follows its advice will become vastly more successful. It is, without a doubt, the best book I’ve ever read on how to build a new business.
I’m using it as my guidebook. The book covers the basics – including how to brainstorm for new business ideas, how to partner, and how to sell your business. It includes contrarian ideas that I know from experience are real secrets to success – like why you should never negotiate.
But the best part of the book – and the part I’m sure you won’t find anywhere else – is James’ ideas about how to manage your health and spirit while you’re going through the rigors of entrepreneurship. I can tell you that I discovered the same valuable keys – how important it is to exercise, sleep, and be grateful. And I can tell you that when my life gets out of whack, I return to the same kind of daily practice James describes.
Even if you never start your own business, I believe this book can serve as a guide to maintaining your happiness in the face of what’s likely to become a tough economy. It might sound strange to say this, but I wish I’d written the book. I think it will be as useful over the next few years as what I publish. James can teach you how to handle pressure, stress, failure, and success. Without these skills, all of the best financial advice in the world won’t make much of a difference.