Sunday, July 9, 2017

The New Homesteaders: Off-the-Grid and Self-Reliant

You may have heard about them: Off-the-gridders living in radical opposition to modern amenities by growing their own food and cutting themselves off from the rest of society. Not so. Sure, more people are choosing to cut their dependence on the power grid, the grocery story and fuel pump. But these new homesteaders are hardly radicals -- they are simply DIYers who, for a variety of reasons, revel in self-reliance. This is their story.



The phone rang when I was shoeless and only a couple of sips into my morning coffee. "Hi, it's Novella Carpenter," the caller said. "My goat is giving birth."
Twenty minutes later I was crouched in the hay at Ghost Town Farm, pushing away chickens and peering into the pen that housed the expectant mother, Bébé. Her udder was so swollen she couldn't get her hindquarters down. Bleating, she clawed at the dirt with her right front hoof as if searching for a stash of Vicodin. "Pass me the iodine," Carpenter said. "We better wash up."
Similar birthing scenes have unfolded countless times in America's agrarian past, but none, I suspected, had the soundtrack of the Ghost Town neighborhood in Oakland, Calif. As Bébé's cries reached an apex they were matched by the caterwauling of a police car siren on Martin Luther King Jr. Way. Then came the intestine-undulating bass of hip-hop from a passing car. Residents disagree on how Ghost Town got its name—for the isolation created when freeways cleft the neighborhood from the rest of the city in the 1950s? For the appallingly high murder rate? For the casket companies that used to be located here? More unanimously accepted is that Ghost Town is a singularly odd location for a homestead that hosts pigs, goats, geese, peaches, potatoes, spinach and bees. Carpenter is living a version of the Laura Ingalls Wilder fantasy all right, but hers is Little House in the 'Hood.
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Carpenter, the author of Farm City: The Education of an Urban Farmer, is, by her own admission, "a bit nuts." If so, she has company—similar farms have sprung up on city blocks in Los Angeles, New York, Pittsburgh and Detroit. And food is hardly the only commodity that people are producing for themselves these days. A small but growing number of American households generate all of their electricity using wind, solar or micro-hydro. But off-the-grid living has come to mean something more nuanced than cutting all ties with utilities and society; for many, it's about finding creative ways to produce and conserve resources at home. Hundreds of thousands of Americans capture rainwater in barrels, can food from their gardens, heat water with solar collectors and commute by bicycle. We may be nearly a decade into the 21st century, but the self-reliant spirit of an earlier era—that of homesteading pioneers—has returned with gusto.
At Ghost Town Farm, Carpenter cleared the head-high weeds from a 4500-square-foot lot and started planting. She didn't ask permission. When the lot's owner discovered the squat garden he warned that he would soon develop the real estate–that was five years ago. Now the lot is verdant with lavender, sage and thyme; lime, rhubarb and raspberries; artichoke, collard greens and avocado.
Strolling through the garden, I became overwhelmed by a feeling that could only be described as vegetable lust. But something deeper than my appetite had been stimulated, too. My grandfather once worked a small mountain farm in Greece. He immigrated to California's Central Valley in his 20s, opening a produce stand and then a grocery store, but he never totally severed his connection to the land. I remember strolling through fruit-laden trees in his backyard as a boy. Now, I was gearing up for major changes myself—the arrival of my first child, the purchase of my own home—and I had been thinking about what sort of sanctuary I could create for my own family. The house I envisioned was solar-powered and garden-ringed, a little safer, smarter and more productive than the wasteful world around it. I was deeply curious about the experiments of modern homesteaders because I wondered just how self-sufficient I could be, too.
In the pen Bébé continued to push and, with a little gentle guidance from Carpenter, the newborn's head crowned. Then the front legs were out. Bébé gave a final, anguished cry and the kid was born, a female, soon to be named Hedwig. Twenty minutes later, she had a brother, Eeyore. The two Nigerian dwarf goats wobbled about on untested legs and, undistracted by a car alarm that had started to blare, tried to find their mother's teats.
America is dotted with remote, off-the-grid homesteads. Certain regions—including western Texas around Big Bend National Park; the mesas outside of Taos, N.M.; and pockets of the Sierra Nevada northeast of Lake Tahoe—host whole mini communities. The Surprise Valley of northeasternmost California supports another. There, where skyscrapers of light slant from the heavens to the mirror-flat floor of the desert, I was crouched on a mattress attached to a rope.
The other end of the rope was hitched to a Ford F-350. The tires spun and soon I was hooky bobbing—surfing at 30 mph, a roostertail of dust in my wake. I felt as gleeful as the Road Runner with Wile E. Coyote giving futile chase. The truck stopped after a few minutes and, as I spat dirt clods from my mouth, a pretty young woman in a red plaid shirt and a white cowboy hat emerged from the cab. "You're lucky you're just visiting," Tierra Hodge said. "If you lived here we would have set the mattress on fire."
I'd been introduced to Tierra through a tortured chain of connections—my wife's cousin's father's friend's daughter, or something like that. She grew up off the grid on land near here, and had agreed to guide me around a place I never knew existed and introduce me to people who didn't necessarily want to be found.

The first stop was welcoming enough: a mountain homestead replete with mud, solar panels, semi-clothed children, and chickens. Then we had lunch in the town of Eagleville with Ed and Wendi Lutz, trompe l'oeil painters who'd retired to build an off-the-grid retreat. Tierra said the place was beautiful—circular, with deep wooden sills and colorful bottles embedded in the walls—but the Lutzes refused to disclose its exact location. I'd told them I was a journalist and might as well have said One World Government Spy. "We have come to value our privacy," Wendi said, eyeing me warily. That afternoon we drove past a doomsday retreat, complete with its own private airstrip, belonging to a wealthy Bay Area businessman. "He's preparing for the end of the world as we know it," Tierra said with an enigmatic smile. I couldn't tell if she was mocking him or applauding his foresight.
The specters of financial crisis, climate change, uncertain energy reserves and a fragile food supply loom large for the new generation of survivalists—and though I don't share their apocalyptic mind-set, I find myself relating to the urge to run for cover. In April, the top-selling action and adventure book on Amazon.com was Patriots: Surviving the Coming Collapse, a work described to me by its author, James Wesley Rawles, as a "survival manual dressed as fiction." Its plot appeals to those on the political right, who fear a too-powerful government—and the anarchy to come in the wake of its inevitable collapse. Leftie off-the-gridders gravitate more to the "grow-local" approach championed by author Michael Pollan. "We're using up the world's resources more quickly than you could imagine," says Ruby Blume of the Institute of Urban Homesteading. "I think we need to be prepared."
Lately, homesteaders of all political stripes have settled upon a common concern: globalization. The shock waves of any crisis—for instance, the subprime meltdown—now spread far, fast and wide. Many doubt that major institutions can be counted upon to save the day. "You're on your own, your job is at risk, and a lot of the commodities you rely upon are vulnerable to disruption," says John Robb, author of Brave New War, which describes how terrorists could exploit global systems. To my ear, such statements straddle the line between reasonable advice and hyperventilated threat. One day you're sipping a frappuccino. The next you're using a pitchfork to fend off rioting mobs. But even if I don't fully agree with the dystopian diagnosis, I like Robb's proposed cure: "You're going to have to start doing more for yourself." The beauty of the DIY solution is that the exact problem doesn't matter; greater self-sufficiency makes sense to survivalists and eco-utopians alike.
In the early 1970s, Tierra's parents established their own fully off-the-grid homestead in Mendocino, and later in Surprise Valley, with the thought that "when society crumbles, we'll be able to raise our children in a safe environment," Tierra says. She and her sister, Celesta, grew up in a tepee; her mom, Tina, and dad, Bill, supported the family by breeding llamas and selling medicinal herbs. Instead of sitting in a classroom the Hodge girls were home-schooled, usually outdoors. Instead of playing video games, they explored the mountains on horseback.
Growing up in the wild was idyllic but not always easy. When Tierra was 15 a boy braved the long dirt road to the homestead to pick her up for a date to the county fair. He emerged from the car looking spiffy in an all-white outfit only to have the Hodges' pet raccoon pounce with muddy paws. Then one of the llamas pegged him with a wad of saliva. Tina, always on the lookout for free meals for wildlife she rehabilitates, shouted after the couple, "Goodbye, honey, have fun, and don't forget to look for roadkill!" "I just about died," Tierra recalls. But in spite of their upbringing—or because of it—the girls turned out fine. Tierra went to college. And Celesta moved almost directly from the tepee to a penthouse in New York, gracing the cover of Cosmopolitan as a fashion model.
The day after hooky bobbing, I found myself standing ankle deep in llama poop with a shovel. My job was to ferry wheelbarrows of the stuff up a hill to a garden, dump the smelly payload and then do it again. And again, ad infinitum, until it got dark or my blisters burst. It was raining, so I was damp, and the sodden manure was getting heavy. Then the clouds broke, and the sun beamed down on the Hodges' secluded mountain—160 acres surrounded by protected wildlands. The air was pine-scented and pulsing with the sound of a creek.

The Slow-Motion Collapse of the American Empire

*Here's the conflict ladies and gentlemen > Can you interpret the last people that came to grips when the Egyptian or Roman empire collapsed? The Egyptian and the Roman "people". Be this through patriotism (Which borderlines on insanity), denial or that terrible normalcy bias? It seems that we can all read about the history of the world and accept that all super powers have fallen at some point yet we can Not accept the reality that it will happen to us = another form of insanity.


Jump into your time machine and let me transport you back to another age.
It’s May 2001 and the Atlantic Monthly has just arrived in the mail.  I’m tantalized by the cover article.  “Russia is finished,” the magazine announces.  The subtitle minces no words: “The unstoppable descent into social catastrophe and strategic irrelevance.”  Could it be that the country I had worried most about as a military officer during all those grim years of the Cold War, the famed “Evil Empire” that had threatened us with annihilation, was truly kaput, even in its Russian rather than Soviet guise?

Sixteen years later, the article’s message seems just a tad premature.  Today’s Russia surely has its problems -- from poverty to pollution to prostitution to a rickety petro-economy -- but on the geopolitical world stage it is “finished” no longer.  Vladimir Putin’s Russia has recently been enjoying heightened influence, largely at the expense of a divided and disputatious superpower that now itself seems to be on an “unstoppable descent.”

Sixteen years after Russia was declared irrelevant, a catastrophe, finito, it is once again a colossus -- at least on the American political scene, if nowhere else.  And that should disturb you far less than this: more than a generation after defeating the Soviet Union in the Cold War, the United States of 2017 seems to be doing its level best to emulate some of the worst aspects of its former foe and once rival superpower.
Yes, the U.S. has a Soviet problem, and I’m not referring to the allegations of the moment in Washington: that the Trump campaign and Russian officials colluded, that money may have flowed into that campaign via Russian oligarchs tied to Putin, that the Russians hacked the U.S. election to aid Donald Trump, that those close to the president-elect dreamed of setting up a secret back channel to Moscow and suggested to the Russian ambassador that it be done through the Russian embassy, or even that Putin has a genuine hold of some sort on Donald Trump.  All of this is, of course, generating attention galore, as well as outrage, in the mainstream media and among the chattering classes, leading some to talk of a new “red scare” in America.

  All of it is also being investigated, whether by congressional intelligence committees or by former FBI director -- now special counsel -- Robert Mueller

When it comes to what I’m talking about, though, you don’t need a committee or a counsel or a back channel or a leaker from some intelligence agency to ferret it out.  Whatever Trump campaign officials, Russian oligarchs, or Vladimir Putin himself did or didn’t do, America’s Soviet problem is all around us: a creeping (and creepy) version of authoritarianism that anyone who lived through the Cold War years should recognize.  It involves an erosion of democratic values; the ever-expanding powers exercised by a national security state operating as a shadow government and defined by militarismsurveillancesecrecyprisons, and other structures of dominance and control; ever-widening gaps between the richest few and the impoverished many; and, of course, ever more weapons, along with ever more wars.

That’s a real red scare, America, and it’s right here in the homeland.
In February, if you remember -- and given the deluge of news, half news, rumor, and innuendo, who can remember anything these days? -- Donald Trump memorably compared the U.S. to Russia.  When Bill O’Reilly called Vladimir Putin “a killer” in an interview with the new president, he responded that there was little difference between us and them, for -- as he put it -- we had our killers, too, and weren’t exactly innocents abroad when it came to world affairs.  (“There are a lot of killers. You think our country's so innocent?”)  The president has said a lot of outlandish things in his first months in office, but here he was on to something.

My Secret Briefing on the Soviet Union
When I was a young lieutenant in the Air Force, in 1986 if memory serves, I attended a secret briefing on the Soviet Union. Ronald Reagan was president, and we had no clue that we were living through the waning years of the Cold War.  Back then, believing that I should know my enemy, I was reading a lot about the Soviets in “open sources”; you know, books, magazines, and newspapers.  The “secret” briefing I attended revealed little that was new to me. (Classified information is often overhyped.)  I certainly heard no audacious predictions of a Soviet collapse in five years (though the Soviet Union would indeed implode in 1991).  Like nearly everyone at the time, the briefers assumed the USSR would be our archenemy for decades to come and it went without saying that the Berlin Wall was a permanent fixture in a divided Europe, a forever symbol of ruthless Communist oppression. 

Little did we know that, three years later, the Soviet military would stand aside as East Germans tore down that wall.  And who then would have believed that a man might be elected president of the United States a generation later on the promise of building a “big, fat, beautiful wall” on our shared border with Mexico?

I wasn’t allowed to take notes during that briefing, but I remember the impression I was left with: that the USSR was deeply authoritarian, a grim surveillance state with an economy dependent on global weapons sales; that it was intent on nuclear domination; that it was imperialist and expansionist; that it persecuted its critics and dissidents; and that it had serious internal problems carefully suppressed in the cause of world mastery, including rampant alcohol and drug abuse, bad health care and declining longevity (notably for men), a poisoned environment, and an extensive prison system featuring gulags.  All of this was exacerbated by festering sores overseas, especially a costly and stalemated war in Afghanistan and client-states that absorbed its resources (think: Cuba) while offering little in return.

This list of Soviet problems, vintage 1986, should have a familiar ring to it, since it sounds uncannily like a description of what’s wrong with the United States today.
In case you think that’s an over-the-top statement, let’s take that list from the briefing -- eight points in all -- one item at a time.

1. An authoritarian, surveillance state: The last time the U.S. Congress formally declared war was in 1941.  Since then, American presidents have embarked on foreign wars and interventions ever more often with ever less oversight from Congress.  Power continues to grow and coalesce in the executive branch, strengthening an imperial presidency enhanced by staggering technologies of surveillance, greatly expanded in the aftermath of the 9/11 terrorist attacks.  Indeed, America now has 17 intelligence agencies with a combined yearly budget of $80 billion.  Unsurprisingly, Americans are surveilled more than ever, allegedly for our safety even if such a system breeds meekness and stifles dissent. 
  
2. An economy dependent on global weapons sales: The U.S. continues to dominate the global arms trade in a striking fashion.  It was no mistake that a centerpiece of President Trump’s recent trip was a $110 billion arms deal with Saudi Arabia.  On the same trip, he told the Emir of Qatar that he was in the Middle East to facilitate “the purchase of lots of beautifulmilitary equipment.”  Now more than ever, beautiful weaponry made in the U.S.A. is a significant driver of domestic economic growth as well as of the country’s foreign policy.

3. Bent on nuclear domination: Continuing the policies of President Obama, the Trump administration envisions a massive modernization of America’s nuclear arsenal, to the tune of at least a trillion dollars over the next generation.  Much like an old-guard Soviet premier, Trump has boasted that America will always remain at “the top of the pack” when it comes to nuclear weapons.

4. Imperialist and expansionist: Historians speak of America’s “informal” empire, by which they mean the U.S. is less hands-on than past imperial powers like the Romans and the British.  But there’s nothing informal or hands-off about America’s 800 overseas military bases or the fact that its Special Operations forces are being deployed in 130 or morecountries yearly.  When the U.S. military speaks of global reach, global power, and full-spectrum dominance, this is traditional imperialism cloaked in banal catchphrases.  Put differently, Soviet imperialism, which American leaders always professed to fear, never had a reach of this sort.
      
5. Persecutes critics and dissidents: Whether it’s been the use of the Patriot Act under George W. Bush’s presidency, the persecution of whistleblowers using the World War I-era Espionage Act under the Obama administration, or the vilification of the media by the new Trump administration, the U.S. is far less tolerant of dissent today than it was prior to the Soviet collapse.  As Homeland Security Secretary and retired four-star Marine General John Kelly recently put it, speaking of news stories about the Trump administration based on anonymous intelligence sources, such leaks are “darn close to treason.”  Add to such an atmosphere Trump’s attacks on the media as the “enemy” of the people and on critical news stories as “fake” and you have an environment ripe for the future suppression of dissent.

In the Soviet Union, political opponents were often threatened with jail or worse, and those threats were regularly enforced by men wearing military or secret police uniforms.  In that context, let’s not forget the “Lock her up!” chants led by retired Lt. General Michael Flynn at the Republican National Convention and aimed at Donald Trump’s political opponent of that moment, Hillary Clinton
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6. Internal problems like drug abuse, inadequate health care, and a poisoned environment: Alcoholism is still rife in Russia and environmental damage widespread, but consider the U.S. today.  An opioid crisis is killing more than 30,000 people a year.  Lead poisoning in places like Flint, Michigan, and New Orleans is causing irreparable harm to the young.  The disposal of wastewater from fracking operations is generating earthquakes in Ohio and Oklahoma.  Even as environmental hazards proliferate, the Trump administration is guttingthe Environmental Protection Agency.  As health crises grow more serious, the Trump administration, abetted by a Republican-led Congress, is attempting to cut health-care coverage and benefits, as well as the funding that might protect Americans from deadly pathogens.  Disturbingly, as with the Soviet Union in the era of its collapse, life expectancyamong white men is declining, mainly due to drug abuse, suicide, and other despair-driven problems.

7. Extensive prison systems: As a percentage of its population, no country imprisons more of its own people than the United States.  While more than two million of their fellow citizens languish in prisons, Americans continue to see their nation as a beacon of freedom, ignoring Guantánamo Bay, Cuba.  In addition, the country now has a president who believes in torture, who has called for the murder of terrorists’ families, and who wants to refill Guantánamo with prisoners.  It also has an attorney general who wants to makeprison terms for low-level drug offenders ever more draconian.

8. Stalemated wars: You have to hand it to the Soviets.  They did at least exhibit a learning curve in their disastrous war in Afghanistan and so the Red Army finally left that country in 1989 after a decade of high casualties and frustration (even if its troops returned to a land on the verge of implosion).  U.S. forces, on the other hand, have been in Afghanistan for 16 years, with the Taliban growing ever stronger, yet its military’s response has once again been to call for investing more money and sending in more troops to reverse the “stalemate” there.  Meanwhile, after 14 years, Iraq War 3.0 festers, bringing devastation to places like Mosul, even as its destabilizing results continue to manifest themselves in Syria and indeed throughout the greater Middle East.  Despite or rather because of these disastrous results, U.S. leaders continue to over-deploy U.S. Special Operations forces, contributing to exhaustion and higher suicide rates in the ranks.

In light of these eight points, that lighthearted Beatles tune and relic of the Cold War, “Back in the USSR,” takes on a new, and far harsher, meaning.
What Is to Be Done?

Slowly, seemingly inexorably, the U.S. is becoming more like the former Soviet Union.  Just to begin the list of similarities: too many resources are being devoted to the military and the national security state; too many over-decorated generals are being given too much authority in government; bleeding-ulcer wars continue unstanched in Afghanistan, Iraq, and elsewhere; infrastructure (roads, bridges, pipelines, dams, and so on) continues to crumble; restless “republics” grumble about separating from the union (Calexit!); rampant drug abuse and declining life expectancy are now American facts of life. Meanwhile, the latest U.S. president is, in temperament, authoritarian, even as government “services” take on an increasingly nepotistic flavor at the top.
I'm worried, comrade!  Echoing the cry of the great Lenin, what is to be done?  Given the list of symptoms, here’s one obvious 10-step approach to the de-sovietization of America:

1. Decrease “defense” spending by 10% annually for the next five years.  In the Soviet spirit, think of it as a five-year plan to restore our revolution (as in the American Revolution), which was, after all, directed against imperial policies exercised by a “bigly” king.

2. Cut the number of generals and admirals in the military by half, and get rid of all the meaningless ribbons, badges, and medals they wear.  In other words, don’t just cut down on the high command but on their tendency to look (and increasingly to act) like Soviet generals of old.  And don’t allow them to serve in high governmental positions until they’ve been retired for at least 10 years.

3. Get our military out of Afghanistan, Iraq, and other war-torn countries in the Greater Middle East and Africa.  Reduce that imperial footprint overseas by closing costly military bases.

4. Work to eliminate nuclear weapons globally by, as a first step, cutting the vast U.S. arsenal in half and forgetting about that trillion-dollar “modernization” program.  Eliminate land-based ICBMs first; they are no longer needed for any meaningful deterrent purposes.

5. Take the money saved on “modernizing” nukes and invest it in updating America’s infrastructure.
6. Curtail state surveillance.  Freedom needs privacy to flourish.  As a nation, we need to remember that security is not the bedrock of democracy -- the U.S. Constitution is.    
7. Work to curb drug abuse by cutting back on criminalization.  Leave the war mentality behind, including the “war on drugs,” and focus instead on providing better treatment programs for addicts.  Set a goal of cutting America’s prison population in half over the next decade. 

8. Life expectancy will increase with better health care.  Provide health care coverage for all using a single-payer system.  Every American should have the same coverage as a member of Congress.  People shouldn’t be suffering and dying because they can’t afford to see a doctor or pay for their prescriptions.

9. Nothing is more fundamental to “national security” than clean air and water.  It’s folly to risk poisoning the environment in the name of either economic productivity or building up the military.  If you doubt this, ask citizens of Russia and the former Soviet Republics, who still struggle with the fallout from the poisonous environmental policies of Soviet days.

10. Congress needs to assert its constitutional authority over war and the budget, and begin to act like the “check and balance” it’s supposed to be when it comes to executive power.
There you have it.  These 10 steps should go some way toward solving America’s real Russian problem -- the Soviet one.  Won’t you join me, comrade?

5 Things Most People Don't Understand About the National Debt


Since this is an election year, you're hearing a lot about the size of the national debt — and the financial imperative to expunge it before it gets passed on to our kids and grandkids.
Donald Trump recently told Fortune that "if I had a choice of taking over debt free or having $19 trillion — which by the way is going up to $21 trillion very soon because of the omnibus budget, which is a disaster. If I had my choice I’ll take no debt every time.”
While he suggested earlier that it would be possible to pay off the entire national debt in about eight years in part by renegotiating existing trade deals, he told Fortune that this isn't necessarily his goal. “You could pay off a percentage of it,' Trump said, referring to the national debt, "depending on how aggressive you want to be. “I’d rather not be all that aggressive. I’d rather not have debt but we’re stuck with it.
The debt debate got a big lift last week when financial commentator James Grant argued last week that every man, woman, and child effectively owes $42,998.12 thanks to Washington's free-spending ways.
In his much-debated cover story for Time magazine (MONEY and Time are both owned by Time Inc., and Money.com does double-duty as the personal finance channel of Time's website), Grant expresses many of the common fears — and a few misconceptions — surrounding the national debt.But the only way to advance the debate is to get past the myths. Here are five things you need to know about the debt to better understand this issue:


#1) The federal government's books are not like a family's finances
In his article, Grant says: "To understand our financial fix, put yourself in the position of the government. Say you earn the typical American family income, and you spend and borrow as the government does. So assuming, you would earn $54,000 a year, spend $64,000 a year and charge $10,000 to your already slightly overburdened credit card. I say slightly overburdened–your outstanding balance is about $223,000."
Grant goes on to add that a big difference between you and Uncle Sam is that the federal government has a central bank to manipulate the economy, the currency, and interest rates to make life easier for Washington policymakers.

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But that's exactly the point. The federal government has a lot more financial flexibility than an American family to manage its mountain of debt.

Financial adviser William Bernstein, author of The Four Pillars of Investing, adds that a family's finances are much more dependent on the strength of the economy than the federal government's is. Workers, for instance, may have trouble accessing credit if they're out of work, their homes are losing value, and the economy is lousy. The federal government, by contrast, can issue new debt and refinance old bonds at better terms when the economy is slowing and interest rates are falling.

Also, the United States government does not have a finite lifespan — the average American lives less than 79 years. When individuals die with debt, those obligations must be taken care of by their estates, which cuts into what's left for their heirs. So someone is always on the hook for repayment. The Federal government does not have a literal ticking clock to race against.


#2) Even if government finances were like a family's checkbook, things aren't at a boiling point — yet.
At the very least, you probably want your elected representatives in Washington to spend within their means, like any family must.
Most critics of the debt cite the fact that at $19 trillion, the national debt represents about 102% of the U.S. gross domestic product, the sum total of all the economic activity in this country each year. Sounds scary. But the health of a family's finances aren't measured this way.
For example, the average U.S. household has outstanding mortgage debt of more than $168,000. Average household incomes, meanwhile, are just below $55,000. That means the typical household's debt-to-"personal GDP" ratio would be more than 300%.

What matters to families isn't their total debt; it's their ability to service those obligations.
Typically, families seeking a mortgage would have to show banks that their debt payment obligations (housing costs, car loan payments, student loan bills, credit card payments, etc.) represent less than 36% of their gross income.
Last year, Washington's total interest payments to service the national debt was just under $225 billion. At the same time, the federal government pulled in nearly $3.2 trillion in total revenues last year. So the federal government's debt obligations represented just 7% of its income last year, down from 17% in 1995.

#3) American households aren't just victims of the national debt — we're benefiting from it too.
By most accounts, the U.S. debt stands at nearly $19 trillion. But in his Time article, Grant points out that some of this money is owed by the Treasury to other parts of the federal government — for instance, the Social Security Trust buys Treasury securities with short-term Social Security surpluses. The Federal Reserve also holds nearly $2.5 trillion in Treasury debt.

Since you can't count the government a victim of money it is loaning to itself, the actual outstanding balance is closer to $13.9 trillion, which works out to $42,998.12 per man, woman, and child

Okay, but the overwhelming majority of the government's debt is actually owned by, and therefore owed to, American institutions and families — those same men, women, and children.
In fact, you're probably investing in U.S. debt through a bond mutual fund you own in your 401(k). Mutual funds alone hold more than $1 trillion in Treasury debt. And about two trillion dollars more is held by public and private pensions, trusts, and insurance contracts that are managed for individuals' retirement needs.

That trumps the $1.3 trillion of the federal debt owned by the Chinese. So foreign governments aren't the only beneficiaries of Washington's borrowing binge.

The question is, are Americans benefiting enough?
To be sure, recent efforts to get the economy into gear — through government spending programs that grew the debt and the Fed's near-zero interest rate policy — have led to historically low interest rates that have hurt savers who have earned next to nothing on their cash over the past decade. And despite a massive amount of stimulus and extremely low borrowing costs, the recovery has been tepid by historic standards.

At the same time, equities are in the midst of the third-longest bull market in history (the rally, which began on March 9, 2009, will become the second oldest bull in history at the end of the month). And falling market interest rates have boosted the value of bonds held by American families, despite low stated yields. For example, you earned about 5% annually on your intermediate bonds over the past decade on a total return basis (which factors in bond yields plus the appreciation in fixed income prices).
If you owned a long-term government bond fund, you would have earned about 7% annually, according to Morningstar. By contrast, the average blue chip stock fund earned 6% a year during that same stretch, which means bond investors earned comparable returns as stock investors without taking on credit risk.

#4) There are some unintended consequences to lowering the debt.
As Uncle Sam has fallen deeper into the red in the aftermath of the global financial crisis, the balance sheets of corporations and individuals have improved significantly. U.S. companies, in fact, are sitting on a record $2 trillion in cash.

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This isn't surprising. There is an underlying relationship between government and private-sector finances. Putting aside foreign capital flows, rising public deficits lead to growing private-sector surpluses.

Think about it this way: If the government spends $1 billion more than it receives in taxes, that money doesn't just disappear — it flows into the hands of workers or companies or institutions. Even if you think this is wasteful spending, the fact is these dollars are moving from the public ledger to the private sector.

All things being equal, many economists believe it's preferable to have rising government debt and private-sector surpluses than the other way around. "Because the U.S. is monetarily sovereign and its citizens aren't, private debt is much more dangerous," says Bernstein. "During the Clinton years we had a budget surplus with correspondingly ballooning private debt. That didn't work out so well," Bernstein says, arguing that soaring private debt played a big role in not just one financial bubble but two — the stock market and real estate crashes that led to the financial crisis.
Meanwhile, lower Treasury debt could affect investors in one way that's not often discussed. (Grant's Time essay, by the way, doesn't argue for a debt-free federal government.)

Right now, U.S. Treasuries — which are the government's I.O.U.'s — are a safe asset that individual and institutional investors can buy to counteract more volatile securities in their portfolios. That's because the U.S. government can always be counted on to pay its debts. (Of course you still have to worry about inflation.)
With fewer Treasury bonds floating around, it would be harder for investors — from pension funds to mutual funds to households to the Social Security Trust — to find ballast for their portfolios. Those investors may have to turn to riskier "private debt — corporate, insurance products and annuities," says Bernstein. "And from time to time, those get ugly."

#5) Even if the debt isn't at crisis levels, it is an important issue.
In the days after the Time cover story was published, Grant has been pilloried in the press for oversimplifying the issue. Yet many of those critiques were so harsh that they made it seem as if there's no potential negative effect of having record levels of debt. Slate, for instance, wrote this:
Thankfully, in addition to the power to tax, the United States has the near magical ability to print dollars. There is no danger that we will run short of them. Rather, the only potential problem is that one day, we will print so much of our currency that it will create excessive inflation, our debts will become worthless, and the bond markets will strike.

While this "potential problem" has not come to pass, "excess inflation" and a bond market in turmoil aren't exactly minor concerns. They can do real harm not just to the economy, but to the lives of everyday Americans. Just ask anyone alive in the 1970s.


Grant also raises an important point in his article: The size of the Federal Reserve's balance sheet. In recent years, the Fed took unprecedented steps to help the nation avoid a deeper and more protracted recession, in part by adding trillions of dollars of bonds to its own portfolio.The Fed now has to do something just as abnormal: unwind those holdings without throwing the markets into disarray or driving up inflation past its preferred 2% level. Even in monetary policy, no good deed goes unpunished.

Full article > http://time.com/money/4293910/national-debt-investors/

Have you ever tried to delete your Facebook account?

*I turned off all notifications, the truth of the matter is that no matter what you do your information will always be in the caches of their servers.
Had enough of Facebook? Here's how to permanently remove your profile from the social network.
Facebook can be a great tool for staying in touch with friends and family but, for some people, the constant bombardment of updates, messages, likes, pokes and advertisements can all become a bit overwhelming, not to mention highly addictive.

In a study by researchers at the University of Winchester, ten self-confessed Facebook “addicts” were asked to stop using their accounts for four weeks. Many quickly became isolated from friends and family and reported feeling "cut off from the world".

Ongoing questions over user Facebook's privacy practices – including a class action lawsuit in Austria involving 25,000 users that claim Facebook illegally tracked users’ browsing habits via software installed on other web pages, and participated in “Prism”, the American spy programme – are also making some people reconsider their membership of the social network.
If you've had enough and want to get rid of your account, you have two options. You can either deactivate you account, which means your profile disappears from the social network but all the information in your account is saved on Facebook's servers in case you decide yo go back, or you can permanently delete your account, which means all your data is removed and you will not be able to regain access.
Depending on whether or not you think you might want to return, here's what you need to do:

How to deactivate your account

Deactivating your account temporarily means you have the option to return to Facebook whenever you want.
  1. Click the downward arrow at the top right of any Facebook page
  2. Select "Settings"
  3. Click "Security" in the left column
  4. Choose "Deactivate your account", then follow the steps to confirm
If you deactivate your account your profile won’t be visible to other people on Facebook and people won’t be able to search for you, but some information, such as messages you sent to friends, may still be visible to others.
If decide you'd like to go back to Facebook, you can reactivate your account at any time by logging in with your email and password. Your profile will be restored in its entirety.

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