In the past week, several self-proclaimed “leading economists” have boldly declared the nation’s recession has ended. Based on a narrow and outdated technical definition, this may be accurate. But the reality is our nation continues in dire economic straights, people everywhere are hurting, and a secure financial future remains far from certain. It remains for each of us a time for personal financial prudence and provident living. As I listen to self-promoting election-facing politicians in the disconnected self-indulgent political culture of our national capitol city tell us “things are getting better,” I’m reminded of Nephi’s prescient words declared twenty-five hundred years ago but oh so relevant to our day: “And others will he pacify, and lull them away into carnal security, that they will say: All is well in Zion; yea, Zion prospereth, all is well-and thus the devil cheateth their souls, and leadeth them away carefully down to hell.” [2 Nephi 28:21] Are we, as a nation and as citizens, being lulled into false security and carefully led down to hell? What is the truth about our economy? Regrettably, in today’s noisy world of sound bites and video clips and twenty-four hour news cycles most American politicians shade the truth for hoped-for political advantage, whereas facts tell only the truth. So look at a few of the facts; available space isn’t sufficient to list yet more frightening data points. Unprofitable Times An astounding 45% of the 27 million small businesses in the U.S. say they are currently not profitable. This is almost beyond comprehension, yet those businesses account for half the nation’s private, nonfarm gross domestic product. Federal tax revenues are on pace to decline 18% this year, the largest single-year decline since the Great Depression. Corporate income taxes have declined 57%. Social Security tax receipts have dropped for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time in history. The last time the federal government’s revenue status was this bleak was 1932 – in the midst of the Great Depression. Simultaneously, the federal deficit is ballooning to a record $1.8 trillion, not long ago an unfathomable number. The spending deficit for this federal fiscal year alone is about the same size as President Bill Clinton’s entire final budget. The housing finance crisis continues to wreak havoc on American families. Nationally 32% of all U.S. mortgages are on homes worth less than the amount of their loans. America’s wealthiest investor, Warren Buffet, once said, “If California prospers, the country prospers. If California has trouble, the country has troubles.” By that measurement, we’ve got big troubles. Everyone knows of California’s gargantuan state budget mess, but that’s only a small piece of the dire Golden State story. In the greater Sacramento area, for example, 51% of all residences with a mortgage are in negative equity. In California, 42 percent of mortgages are “under water.” According to a report released this week, 2.9 million California mortgages are reported in a state of negative equity and 3.1 million more are nearing it as the housing crisis persists and the economy worsens. Add to that bleak news a report just issued by the respected non-partisan Congressional Budget Office entitled “The Long Term Budget Outlook”. Their not-surprising forecast: spending and deficits will continue to grow. Most alarming is CBO’s prediction that balancing the budget in 2020 will require a tax increase of almost 50 percent from the past half century’s average. Are you ready? Overly Optimistic Even these unsettling projections are likely overly optimistic because projections for defense cost are almost certainly unrealistically low. Declining defense spending cannot continue in today’s dangerous world of unpredictable rouge states, unaccountable nuclear powers, and globally accelerating fundamentalist terror. Add to that the considerable unbudgeted costs of refurbishing America’s military – its equipment battle-damaged or destroyed, its material depleted, and its noble personnel exhausted from fighting two concurrent wars in distant theaters of combat. At least forty-six states, and potentially all fifty, face severe tax revenue declines with burgeoning state budget cost obligations they simply cannot meet. If you thought this year’s state budget challenges were concerning, next year is set to be far more problematic. Oh, and I failed to mention government health care spending proposals. The CBO reported the Senate Finance Committee’s health care bill would add $1.6 trillion in debt over the next decade, and Sen. Edward Kennedy’s health committee bill would add $1 trillion. But save that topic for another day. In just my lifetime the United States has gone from being the world’s greatest creditor nation to now the world’s greatest debtor nation. Something is very wrong with this picture. The Only Solution The only real solution to this seemingly never-ending and suicidal disaster is for an honest and rigorous national recognition that we simply cannot afford an ever bigger and more costly government at every level. Until that happens, which won’t be anytime soon, plan on higher taxes for your future. Plan on a shrinking economy. As the CBO points out, deficits penalize income, investments, and savings – so plan on that too. In seeming desperation, our national government is selling record amounts of debt with a plan to borrow our way out of this economic crisis. Long term it can’t work; it won’t work. Prophets have warned us. Several times in scripture is recorded the Lord’s divine injunction to “Establish a house of order.” While federal and state governments are unlikely to put their houses in order any time soon, we can put our own personal houses in order. We can protect our families from the intensifying economic storm clouds roiling all about us. No Comments | Post or read comments FEATURES |
May 8, 2026
May 8, 2026
