The Debt Crisis – Part 3 – An Unknown Future

Want to know more about the current American debt crisis? Read the previous posts in this series. Part 1 describes the basics of our national debt, and part 2 explains the present crisis.

What if the government debt reaches its debt limit, and politicians don’t pass a raise of that limit?

There is one guarantee here. If the debt limit is reached, the Treasury will not lawfully be able to issue any more debt. According to one CNN article, this will leave the country with $118 billion per month in unfunded spending. Without the ability to borrow more funds, this amount must either be cut from the federal budget, or “created” through the printing of currency. Eeek.

What are some possible scenarios?

We don’t have to worry about other countries demanding payment. What we do need to worry about is getting to a point where we can’t find investors willing to purchase our debt. If that happens, we’ll either need to drastically cut  national expenditures, or create more income to meet the debt needs of our country. Income can be increased by either (a) taxation (b) printing more currency.

Scenario A:

The debt limit is raised, and eventually a budget is passed that quickly draws down the deficit (and eventually the overall debt). Within 10 years we are back to pre-1980 debt levels.

Scenario B:

The debt limit is raised, and a budget is passed that slowly draws down the deficit. The debt limit remains high for decades, and the economy contracts as politicians continue to cycle through spending and cutting sprees. Taxes increase. Americans learn to drive used cars and cook with beans as lifestyles begin to realign with income.

Scenario C:

The debt limit is raised, and a budget is passed that focuses on spending the economy back into health. Government gets bigger, taxes get bigger, citizens get smaller. The debt to GDP ratio increases, but US debt is still funded as more favorable than alternatives. This scenario would eventually roll into either option B or D.

Scenario D:

The debt limit is raised, and then raised again, as politicians cannot agree on a budget. US long term security yields increase slowly, and then rapidly as investors become wary of the country’s ability to service its debt. Left with a huge deficit, the government prints its “necessary” debt (by some fancy pants monetizing), while telling themselves that it’s a one-time, temporary measure. The value of the dollar drops and high inflation, then hyper inflation (generally defined as inflation percentages increasing daily rather than monthly) ensues.

Scenario E:

The debt limit is not raised. A future budget is not agreed upon. Rather than drastically cutting spending to meet the steadfast debt ceiling, the government begins to monetize the debt. High inflation ensues.

Which scenario is most likely? I believe a combination of scenarios B & C are most likely, due to the current political climate. In essence, the government is most likely to “kick the can down the road”.

Keep in mind when you’re hearing the current debt proposals, that our current budget deficit amounts to $1.267 trillion ANNUALLY. Even the most aggressive proposals only attempt to capture a small amount of that deficit, leaving the remainder to be dealt with at some point in the future.

So what can I do? 

Get out of debt. This is counter-intuitive to the possible inflation we might observe given scenarios D or E, but this is an important step toward changing the American mindset toward money, which has ultimately put us in this position.

Make friends and increase your community. If our country does fall on hard times (and indeed, it already has for many) who you know will make a difference both in shared knowledge and in positive attitude.

Hedge your investments. No, not in a “I’m a fund manager trying to predict the future kind of way” but more in a “I’m a mom with little kids and I’m not sure what’s going to happen, but God is good” kind of way. Invest physically and monetarily in God’s work here on earth, taking joy in God being glorified. Consider also investing in tangibles that would maintain their value even amongst high inflation.

Memorize scripture; it’s infinitely more valuable than beans, bullets, and band-aids. Did I just use that semi-colon right? I need to get these things figured out if I’m going to home school 🙂

 

Kings of the Garden

Slugs and rain included, this was by far the most productive gardening season at Maxwell House. Why? This success is by no fault of my own olive drab thumbs, I assure you. Two words: healthy soil. Additions to our lifeless dirt included fall leaf amendment (everyone thought I was crazy but it rawked the house garden come springtime), spring compost, and fish fertilizer (advice curtesy of Mr. JB who really DOES have a green thumb).

In a nutshell; I spent four years depleting soil that didn’t have much nutrients to begin with, and my garden was looking more terrible with each passing year. In one year, with a healthy dose of once-per-year amendments, I’ve seen crazy good results.

Though the pumpkins were itsy bitsy, and the green beans yielded an average of one lousy bean per plant, the carrots, lettuce (pre-slugs), squash, and kale did great. Kale was the real king of the garden this year. I enjoyed the spring spinach, but the season is so short for its cold-loving self. The kale (from seed) came on early, and is still now producing spectacularly. I was even more excited when google enlightened me on the storing options of kale: freezing, drying, and canning. This year I’ve been drying the plants, and I love that I only have to run the dehydrator a few hours to get the leaves perfectly crisp and storable. Now the challenge is to actually remember to use these sweet bits in soups this winter 🙂

Here is this year’s list of garden winners and losers (dontcha like how I make it sound as if this is a list I’ve been posting here every year, rather than this being its inaugural writing?)

Winners:

• Kale
• Mixed lettuce (pre-slugs)
• Crookneck squash
• Carrots (scarlet nantes)
• Broccoli (Green Goliath?)

Losers:

• Green Beans
• Patty Pan squash (they seemed great in the beginning, but they just took up too much space)
• Munchkin Broccoli (I know I loved you last year Munchkin, but this year you just annoyed me)

I’d like to start getting serious about planting species of veggies that are truly suited for this area. I’ve played around with tomatoes and some veggies that do OK here, but now I’m interested in understanding which veggies will provide the most food for the least amount of work. If I were a colonist, and my family were dependent on this garden, which varieties would I be choosing? Next year I want to try beets, turnips, onions, and garbage-can potatoes. We’ll likely put in more carrots and Kale. I’m really excited to see how beets fare in the garden.

What about you? What varieties worked well for you this year?

Here’s an interesting link for possible perennial veggie varieties (yay for perennials!): PerennialVegetables.org’s cold-hardy list

 

Repost: Emergency Preparedness – Summary

Note: this summary was first posted in June of last year. I’ve been encouraged by revisiting these topics, and I hope you have been too.

Well, I’m FINALLY ready to wrap up the Emergency Preparedness series! Summaries and action steps from this series:

Food Storage

1. Identify your food storage goals. What kind of time frame would you like to stock up for? A week? A month? Three months? Our goal is to have three months of good food plus 3 months of beans and rice. **We’re now trying to up our storage to 1 year. Because we cook with long-storing ingredients every day, it’s not too hard to extend this goal
2. What types of food do you want to stock? Beans, rice, and wheat are popular choices. To this short list we personally add powdered milk **we’ve switched from powdered milk to Swiss Whey, available from Wholy Living, this stuff is waaaay better than powdered milk** and canned tomatoes.
3. Work your food storage into your meal plans so that you know how to cook with these items.

Helpful links from this post:

• Safely Gathered In – Food storage tips, stocking schedules, and recipes, plus how to prepare an emergency car kit and 72-hour kit
• Wolf Lake Wellness – A local food coop that makes monthly group purchases of organic produce and Azure Standard food items. They updated their site and database method and it is awesome…
• Wholy Living – A local grainary that sells miscellaneous food items ideal for storage.
• Organic Alaska – An Anchorage area coop that sells Azure Standard food items.

Water for Emergencies

1. Know how much water you need (One gallon per day per person is recommended)
2. Know your water sources (supply of bottled water at home, unconventional reservoirs in the house, nearby lakes  and streams)
3. Get ‘er done! Buy gallons of water, water purification tablets, pumps, etc. (according to your need).

Helpful links from this post:

• American Red Cross – page about water purification
• REI – water purification tablets and pumps

Warmth During Emergencies

During an emergency, two good options exist for staying warm:

1. Ditch your house in favor of somewhere that has an alternate heat source. If this is your chosen option, take steps to protect your house from freezing temps.
2. Install a wood stove or gather a generator and electric heaters for a temporary home heating solution.

Helpful links from this post:

• This Old House – tips for protecting your house from the cold
• Simply Insulate – How to determine your current R-value and add insulation
• Central Plumbing & Heating – if you’re in the market for a stove, keep in mind their annual 20% off sale

At Maxwell House we’ve completed our food storage goals. We still aren’t storing much water, and we’d like to eventually get a nice hand filter, maybe at REI’s fall sale? This is the area that we’ll need to focus on the most. With regards to heating, we’ve got our chimney in! **The entire stove is in and kept us toasty last winter, we are sooooo glad we bit the bullet and made that purchase** Yay! Hopefully within a month we’ll have the hearth built and the wood stove in place.

A final word on emergency preparedness: perhaps the most important thing you can do to prepare for an emergency is to MEMORIZE SCRIPTURE. A verse stored in your noggin’ and remembered in times of distress is more valuable than any food or water storage. I’ve admittedly gotten lax in my practice of memorization (the monthly kid’s verse notwithsdanding), I want to make it a priority again. **Right now I’m working through Romans 3. Anyone interested in memorizing this chunk with me?

 

Repost: Emergency Preparedness – Part IV

This last year we made a huge step in preparing our home for potential gas/electric failures. We purchased the below stove and installed it. Our stove cranked away during the winter. We both feel that this has been one of our best purchases. We got 30% of our investment back as a tax credit, and this credit is available until the end of this year on efficient stoves. We were also able to claim the costs of adding further insulation to our attic, and received an additional 30% back through this same credit. I can’t explain how nice it is to know that if the power stops (as it did for a couple of hours this last winter), or prices skyrocket, we have over a years worth of warm heat split and stacked. If you’re interested in purchasing a stove yourself and have any questions on the brand/dealer we went through, feel free to ask. Below is the original post on this topic:

Finally, the last of the Emergency Preparedness series, WARMTH. Check out the past posts for WATER and FOOD.

In an Alaskan winter, where temperatures can often dip to -30 degrees, it is prudent to have a plan for keeping your family warm if gas and power are lost. Out of the three topics discussed in this series, this implementation is likely to be the most costly. Your options if your primary heat source is unavailable during the winter months is 1) abandon the house and seek shelter elsewhere, or 2) prepare by purchasing and implementing a second, “off-grid” source of warmth. We’ll take a look at these two options separately:

1. If you don’t have a way to heat your home in an emergency, you’ll want to take steps to protect your investments from freezing temperatures. To lessen the speed at which heat leaves your home, take the following steps: check the weather stripping around your doors and windows, and replace if necessary. Check your attic insulation and blow/lay in more if necessary. Simply Insulate has detailed information on determining your actual and recommended R-value and adding insulation.
2. Install an off-grid source of heat. Temporarily, heaters that run off of propane could be useful, but they’re not meant for long term use, and they must be used carefully to insure the safety of your house and family. A generator can be tied into your current heating system to provide warmth, or a generator can be used to power several electric heaters. Your best bet if you’re interested in long-term off-grid warmth is to invest in a wood stove. We just bought a stove at Central Plumbing and Heating’s annual sale last month. With the 20% off discount we were able to purchase the stove, pipe, and accessories for less than it would have cost for just the stove at regular prices. Thank you God! If you’re in the market for plumbing or heating supplies, keep this sale in mind as it affects the prices of nearly all items in CPH.

Don’t get overwhelmed by the amount of work it takes to get prepared in this area. Baby steps, eh? For example, you could start saving for a stove and plan on checking your insulation R-Value this summer. Have fun crawling around in your attic 🙂

 

Repost: Emergency Preparedness – Part III

This next emergency preparedness topic deals with storing and obtaining water during a catastrophe. How are we doing? Not too well. We did buy some iodine (and neutralizer) tablets. That’s a start, but I’d still like to begin storing more water. That’s a hard thing to remember when we’re surrounded by fluffy white drifts of frozen water all winter!

Today we’ll explore how to obtain/maintain water for emergencies.

The first step is to consider how you currently get your drinking water. Are you on a city water/septic system? Or, do you get your water from a well? If you’re on a city system there may or may not be water flowing during an emergency. Additionally, the water supply may become contaminated. You’ll want to consider storing your emergency water, rather than depending on the water system to supply it for you.

If you currently get your water from a private well, it is possible to install a hand pump that works along side your current submersible electric pump. For a top of the line deep well hand pump, Bison Hand Water Pumps offers a kit for around $1500. Ouch. There are cheaper hand pumps out there, such as this one for $75, but it’s only rated for a depth of 22 feet. If your well’s static depth (height from the ground to the top of the water table) is under 30 feet, you can get away with a shallow well pump like the cheaper one above. However, most wells would need a more expensive deeper pump, which is going to be costly. From my research it looks like some hand pumps can be operated along side an electric pump, and some can’t, so make sure to do your research before purchasing.

If there are alternate sources of water nearby, they’ll need to be purified either through filtering, treating, or boiling. From the American Red Cross:

• Boiling: Boil water for 3-5 minutes (rolling boil)
• Disinfection: 16 drops of bleach per gallon of water. Stir and let stand for 30 min. Repeat if there’s no slight bleach smell

A cursory look at water filters at REI.com shows a starting price of $65 for the typical filter, with replacement filters costing $10-30. A filtering water bottle ($40-$50) might be a good purchase to have around for emergencies, but replacement filters for it are costly at $25.

The bottom line:

1. Know your need – at the Maxwell House we’re looking at 3+ gallons per day
2. Know your sources – we aren’t storing much water (1 case of bottled), but Kevin is savvy about alternate sources in the house (hot water heater). We have a well, but it’s too deep for a cheap-o pump. There is a small lake 1/4 mile from our house.
3. Know what’s required of you next – Water is $1 gallon at WalMart. I think we’ll stock a couple of days worth of these. I need to find our bleach and make sure I have a small container for our portable emergency kit (backpack). I’m going to keep an eye out for a sale on filters/filtering water bottles. It’d be nice to have one someday for all of those family backpacking trips I have planned in my head 

 

Repost: Emergency Preparedness – Part II

In March of last year I did a short series on Emergency Preparedness. It was fun. I’ll be revisiting this series over the next couple of months, with some updates on how we’re doing on our own preparedness. First up is food storage. Right now we’re doing great on sheer bulk (oodles of rice, beans, and grains) but we’re not doing well on variety. Note to self: buy varietal food storage items.

Today we’ll tackle food storage.

First, you’ll want to identify your goals for your family with regards to food storage. Would you simply like to have enough food to last for a week without replenishment? One month? Three months? A year? Our general goal is to have three months worth of food storage, with an additional three months of “all-we-have-is-rice-and-beans-but-our-bellies-are-full” kind of storage.  We already have plenty of beans, rice, and wheat, but we’d like to plan out our additional storage a bit better: canned goods, dried food, etc. One of my favorite food storage sites is Safely Gathered In. This site has ongoing Long-term storage ideas (beans, rice, oats, etc.) with recipes, as well as ongoing projects such as an emergency car kit and a mobile 72-hour emergency kit. Right now they’re focusing on gathering beans for the month of March, and putting together car kits (each tuesday you add something new to the kit). I like how this site has broken food storage and emergency preparedness down into specific baby steps.

Secondly, identify what items you’d like to stock up on and purchase them. You can either follow Safely Gathered In’s method, or use your own. Purchase your food all at once, or add to your stash month by month (the most popular choice). Shopping at Costco or Sam’s is a good way to gather large amounts of canned goods, rice, beans, and powdered milk. Another choice is to ask about purchasing in bulk from one of the local grocery stores, or to order from a food coop. If you’re interested in the food coop option (ordering from either Azure or UNFI), check out Wolf Lake Wellness, Wholy Living, or Organic Alaska.

Thirdly, you’ve got to work your food storage into your meal planning. The easiest way to do this is to learn to cook from scratch. I’m betting most of you reading this already have taken that route 🙂 The fewer items (variety of items, not quantity) you have in your food storage, the easier it is to rotate them in to your meals. Our goal is to primarily stock grains, legumes and canned tomatoes. We also keep a giant box of powdered milk around, but I’m terrible about rotating it in, so we might just end up tossing it and buying a new one occasionally. I’m ok with a small amount of waste, given that we’ll have a box if we ever need one. Rice, beans, wheat, and tomatoes are easy to incorporate into our meals, and we don’t have to worry about any food storage going bad.

Some more helpful links:

• The Food Storage FAQ – Different popular food storage items, how to store them, and their shelf life
• Sprout People – Many food storage items can easily be sprouted, and there are some big claims out there as to their healthfulness. In the event living off of your storage becomes necessary for a bit, it’d sure be nice to know how to sprout even if it’s not an every day occurrence.
• Every Day Food Storage – Another popular food storage blog that walks their readership through the necessary steps to food storage. This blog has a really hip layout, which is why I prefer the simplicity of Safely Gathered In. Kind of like that whole “all the cool kids are wearing flip-flops, so I’m gonna wear boots” kind of thing. I’m wierd.
• Wholy Living’s Sixth Month Food Storage – It’s a whopping $1480, but you can knock out a whole 6 months of going to the store all at once. Sweet.

*Janeen’s Note: There are a lot of well-meaning folks out there who have let their fervor about storing up food turn into a religion in itself. They feel confident in the future by amassing large quantities of physical sustenance. We are NOT called to this type of confidence. Our confidence is to be in Christ alone, and it’s he whom we trust for the future, not our buckets of beans in the garage. I have to remind myself of this whenever I start getting a little crazy with my food storage planning 🙂