Interest on debt

Having been a financial planner for many years and specializing on retirement, it was not unusual for me to hear people express concern about running out of money after they retired. They wanted a plan that would allow them to live off of the interest from their savings since they realized that once you started using principal it was a downward spiral to bankruptcy. This brought me to a new way of understanding the difference between government and private business. Government provides services but does not create wealth. Private industry creates wealth. Now think of the wealth as interest on your investment. As long as we continue to create wealth (interest) the government has money to function and provide services, but if they use up all the wealth and start going after principal the country is on the downward spiral to bankruptcy and I believe we are close to that point. 6 million on unemployment 58 million on Medicaid 5 million on SCHIP 61 million SS and SSI 41 million on food stamps There are currently 145 million Americans working. About 70 million of those pay no income tax and 20 million of that 70 get back an average of $2,000 per year from the government from Earned Income Credit (EIC). Have we reached the tipping point?