The Contagious and Infectious Ideas That Led To Financial Ruin Doctors now agree that a single factor can predispose a person to disease.
That factor is stress.
Understanding what stress is and how it comes about would be, therefore, an important study.
In my previous article, the definition of financial ruin was given and the family unit as the building block of a nation was examined for changes.
The question of why the change occurred was raised.
If a woman were to spend her family out of house and home, they would say she was mentally ill.
They would proclaim she had no self-control and needed drastic treatment.
If a man were to gamble away the family's life savings, it would be indisputable grounds for divorce.
Suppose also, that upon questioning that frivolous husband or wife as to their purpose for the overspending they claimed a threat from neighboring towns.
This they might claim, required security systems, guns, bombs and artillery with the intention of bombing a neighboring city if need be.
You might say they were psycho, right? Good thing this is only a hypothetical husband or wife.
Or is it? Let's take a look at the relationship between war and the national debt.
World War I was waged from 1914 to 1918 under Woodrow Wilson.
See how that relates to the National Debt: 07/01/1914 - $2,912,499,269.
16 07/01/1915 - $3,058,136,873.
16 07/01/1916 - $3,609,244,262.
16 07/01/1917 - $5,717,770,279.
52 07/01/1918 - $14,592,161,414.
00 07/01/1919 - $27,390,970,113.
12 That's a $24.
4 billion increase.
For 12 years the debt was being paid off and got as low as $16.
8 billion in 1931 but it never returned to the $5.
7 billion range.
It then rises at about $3 billion per year during the presidency of Franklin D.
Roosevelt.
World War II came next and the debt rose more than 500%.
See the figures below: 06/30/1941 - $48,961,443,535.
71 06/30/1942 - $72,422,445,116.
22 06/30/1943 - $136,696,090,329.
90 06/30/1944 - $201,003,387,221.
13 06/30/1945 - $258,682,187,409.
93 That's a $210 billion increase.
To put this in perspective with our analogy, that would be similar to the wife or husband driving their debts up from $500,000 to $2.
5 million within four years.
According to some sources, borrowing from other countries truly began as a solution to funding World War I.
We borrowed from other countries to cover the expenses in the form of "U.
S.
Treasuries.
" So who do we owe that money to? What can you do if your debt is so high it can never be paid? Whoever thought up this solution was brilliant.
We needed money for a war...
so we sold our debt.
And these are the countries that own our debt.
1.
China - $1,160.
1 billion 2.
Japan - $882.
3 billion 3.
United Kingdom - $272.
1 billion 4.
Oil Exporters - $211.
9 billion 5.
Brazil - $186.
1 billion 6.
Carilb Bnking Ctrs - $168.
6 billion 7.
Taiwan - $155.
1 billion 8.
Russia - $151.
0 billion 9.
Hong Kong - $134.
2 billion 10.
Switzerland - $107.
0 billion 11.
Luxembourg - $86.
4 billion 12.
Canada - $76.
8 billion 13.
Singapore - $72.
9 billion 14.
Germany - $60.
5 billion When Herbert Hoover took office (1929 - 1933), he actually reduced the debt by about $3 billion until his final year.
Under Dwight D.
Eisenhower, the debt went up by $22 billion.
Under JFK the debt went up by $17 billion in only two years.
Barely noticeable compared to the skyrocket climb to over a trillion during Ronald Reagan's presidency.
At the time of this writing, the national debt exceeds $10 trillion.
Does an increase in population play a part in this? Some argue that the only way to see the true trend is to measure "per capita" or in ratio to the U.
S.
population.
Alright, let's be fair then.
The U.
S.
Census projected 311,352,899 people in the United States.
as of 2010 with 225,206,000 over 18 years of age.
Basically that means every adult 18 or over would have to pay $60,174 in order to pay off the debt.
Compare that to 1970 when people over 18 could have shelled out a measly $2,810 and made the U.
S.
A.
solvent.
Some financial experts claim that we are now in a hyper-inflation, with the debt increasing at an average of $4 billion per day since September 28, 2007.
Scary.
No wonder people are buying gold and silver and banking outside their country.
Historically speaking, hyper-inflation is followed by bankruptcy.
In fact, 14 countries are near bankruptcy or already bankrupt.
Is this entirely the U.
S.
government's fault? The United States government is a government for and by the people.
Before you gasp, point fingers and blame the government for this financial disaster, realize that Americans have been rapidly going into personal debt for decades.
Many filed bankruptcy - leaving their creditors high and dry.
Not paying your creditor was just unthinkable to the majority of citizens following the Great Depression.
However, this is changing.
The figures below show a rising trend of filed bankruptcies.
Notice that business filings went down last year while non-business filings went up.
Yearly Non-Business and Business Bankruptcy Filings: 2010 Total: 1,596,355 Non-Business = 1,538,033 Business = 58,322 2009 Total: 1,402,816 Non-Business = 1,344,095 Business = 58,721 2008 Total: 1,042,993 Non-Business = 1,004,342 Business = 38,651 2007 Total: 801,269 Non-Business = 775,344 Business = 25,925 2006 Total: 1,112,542 Non-Business = 1,085,209 Business = 27,333 The cure for overspending is employment and production! Keeping the analogy of the home unit as how the economy should run, selling your debt to your family and friends cannot be an ongoing solution.
Obvious as it is on a home-based level, how do we get out of this situation.
Productivity is the cure for overspending.
Small business and individuals need a boost.
Small companies need a boost.
With most of the new companies popping up on the internet, how do we achieve that? By understanding popular demands, finding the hottest products that people will buy, putting people to work and moving commodities fast.
The internet does provide that information and small business is starting to catch on how to use it.
There is hope for the future!
That factor is stress.
Understanding what stress is and how it comes about would be, therefore, an important study.
In my previous article, the definition of financial ruin was given and the family unit as the building block of a nation was examined for changes.
The question of why the change occurred was raised.
If a woman were to spend her family out of house and home, they would say she was mentally ill.
They would proclaim she had no self-control and needed drastic treatment.
If a man were to gamble away the family's life savings, it would be indisputable grounds for divorce.
Suppose also, that upon questioning that frivolous husband or wife as to their purpose for the overspending they claimed a threat from neighboring towns.
This they might claim, required security systems, guns, bombs and artillery with the intention of bombing a neighboring city if need be.
You might say they were psycho, right? Good thing this is only a hypothetical husband or wife.
Or is it? Let's take a look at the relationship between war and the national debt.
World War I was waged from 1914 to 1918 under Woodrow Wilson.
See how that relates to the National Debt: 07/01/1914 - $2,912,499,269.
16 07/01/1915 - $3,058,136,873.
16 07/01/1916 - $3,609,244,262.
16 07/01/1917 - $5,717,770,279.
52 07/01/1918 - $14,592,161,414.
00 07/01/1919 - $27,390,970,113.
12 That's a $24.
4 billion increase.
For 12 years the debt was being paid off and got as low as $16.
8 billion in 1931 but it never returned to the $5.
7 billion range.
It then rises at about $3 billion per year during the presidency of Franklin D.
Roosevelt.
World War II came next and the debt rose more than 500%.
See the figures below: 06/30/1941 - $48,961,443,535.
71 06/30/1942 - $72,422,445,116.
22 06/30/1943 - $136,696,090,329.
90 06/30/1944 - $201,003,387,221.
13 06/30/1945 - $258,682,187,409.
93 That's a $210 billion increase.
To put this in perspective with our analogy, that would be similar to the wife or husband driving their debts up from $500,000 to $2.
5 million within four years.
According to some sources, borrowing from other countries truly began as a solution to funding World War I.
We borrowed from other countries to cover the expenses in the form of "U.
S.
Treasuries.
" So who do we owe that money to? What can you do if your debt is so high it can never be paid? Whoever thought up this solution was brilliant.
We needed money for a war...
so we sold our debt.
And these are the countries that own our debt.
1.
China - $1,160.
1 billion 2.
Japan - $882.
3 billion 3.
United Kingdom - $272.
1 billion 4.
Oil Exporters - $211.
9 billion 5.
Brazil - $186.
1 billion 6.
Carilb Bnking Ctrs - $168.
6 billion 7.
Taiwan - $155.
1 billion 8.
Russia - $151.
0 billion 9.
Hong Kong - $134.
2 billion 10.
Switzerland - $107.
0 billion 11.
Luxembourg - $86.
4 billion 12.
Canada - $76.
8 billion 13.
Singapore - $72.
9 billion 14.
Germany - $60.
5 billion When Herbert Hoover took office (1929 - 1933), he actually reduced the debt by about $3 billion until his final year.
Under Dwight D.
Eisenhower, the debt went up by $22 billion.
Under JFK the debt went up by $17 billion in only two years.
Barely noticeable compared to the skyrocket climb to over a trillion during Ronald Reagan's presidency.
At the time of this writing, the national debt exceeds $10 trillion.
Does an increase in population play a part in this? Some argue that the only way to see the true trend is to measure "per capita" or in ratio to the U.
S.
population.
Alright, let's be fair then.
The U.
S.
Census projected 311,352,899 people in the United States.
as of 2010 with 225,206,000 over 18 years of age.
Basically that means every adult 18 or over would have to pay $60,174 in order to pay off the debt.
Compare that to 1970 when people over 18 could have shelled out a measly $2,810 and made the U.
S.
A.
solvent.
Some financial experts claim that we are now in a hyper-inflation, with the debt increasing at an average of $4 billion per day since September 28, 2007.
Scary.
No wonder people are buying gold and silver and banking outside their country.
Historically speaking, hyper-inflation is followed by bankruptcy.
In fact, 14 countries are near bankruptcy or already bankrupt.
Is this entirely the U.
S.
government's fault? The United States government is a government for and by the people.
Before you gasp, point fingers and blame the government for this financial disaster, realize that Americans have been rapidly going into personal debt for decades.
Many filed bankruptcy - leaving their creditors high and dry.
Not paying your creditor was just unthinkable to the majority of citizens following the Great Depression.
However, this is changing.
The figures below show a rising trend of filed bankruptcies.
Notice that business filings went down last year while non-business filings went up.
Yearly Non-Business and Business Bankruptcy Filings: 2010 Total: 1,596,355 Non-Business = 1,538,033 Business = 58,322 2009 Total: 1,402,816 Non-Business = 1,344,095 Business = 58,721 2008 Total: 1,042,993 Non-Business = 1,004,342 Business = 38,651 2007 Total: 801,269 Non-Business = 775,344 Business = 25,925 2006 Total: 1,112,542 Non-Business = 1,085,209 Business = 27,333 The cure for overspending is employment and production! Keeping the analogy of the home unit as how the economy should run, selling your debt to your family and friends cannot be an ongoing solution.
Obvious as it is on a home-based level, how do we get out of this situation.
Productivity is the cure for overspending.
Small business and individuals need a boost.
Small companies need a boost.
With most of the new companies popping up on the internet, how do we achieve that? By understanding popular demands, finding the hottest products that people will buy, putting people to work and moving commodities fast.
The internet does provide that information and small business is starting to catch on how to use it.
There is hope for the future!