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Lauren and Rob Hudson: A positive message about nation’s difficulties with saving money, avoiding debt


Columns for families based on the book “It Can Be Done” @studentsleadusa

America’s people and America’s government experienced difficulties in saving money and avoiding debt. Fortunately, savings and debt is a matter largely within our control. Today’s older generations chose not to control their debt.

For more than a century, our federal government had very little debt. Leading up to, during, and after the Great Recession in 2008, our federal government began piling up debt. Our national debt now exceeds twenty trillion dollars, an amount that’s hard to imagine. To put it into perspective, if we tried to pay it back a dollar every second, it would take several hundred thousand years to become debt-free.

Why is federal government debt a problem for our country? We must pay both the money and the interest on the debt. Paying off our debt makes it more difficult to pay for things like bridges, roads, and sewers. We can’t thrive and grow without these basic services, yet the federal government now spends more taxpayer dollars on interest than it does funding these things for society. Meanwhile, many states have run up pension debts which threaten the funding of essentials like schools and public safety.

With personal debt, the Great Recession taught us that too much debt can harm America and the entire world. Here’s how it happened. Prior to the Great Recession, just about everybody encouraged each other to go into big, big home debt, thinking homes would always be very valuable and would always become more valuable as time progressed. The government encouraged it; bankers encouraged it; realtors encouraged it. Investors bundled up home loans and made a fortune re-selling them as “mortgage-backed securities.”

People bought larger homes or bought their first homes, even if they could not really afford them. People at all levels bought into the idea that big home debt was okay and things would be good in the long term.

Very few people paused and asked, “Is all this debt risky?” Very few people asked, “What if things go wrong?”

Just prior to the Great Recession, a storm cloud began to form. The economy started into a downturn, with people struggling to pay back big loans they took out to pay for their homes. People began losing their jobs, becoming unable to pay their debts. Homes became less valuable. Many of the mortgage-backed securities became worthless, causing insurers who insured the mortgage-backed securities to lose fortunes. It started a downward economic spiral which lasted for years and affected the world.

Enormous debts threaten American exceptionalism because it weakens and limits us. Like a family paying off high credit card debt or a large home loan, handling the nation’s debt won’t be easy. The only way to pay off debt will be to increase government revenues, decrease the money government spends, or both.

We should all hope our economy can grow, thus allowing more people to work, earn money, and pay taxes. This is an excellent way to raise more tax money to pay off the debt. Meanwhile, we should all hope that our governments spend our tax money wisely.

The positive message here is that we can learn from our past mistakes. Although it wasn’t fair for past generations to build up debt for future generations to re-pay, there is always honor in meeting our obligations. As the next generation tackles our nation’s debt, people will someday look back on them as smart leaders who helped preserve the country’s future.

Join us next week when we explore the common ground of community involvement. Frost Brown Todd LLC Member Rob Hudson is a Past Chair of the Northern Kentucky Chamber and a recipient of its Frontiersman Award. 2018 Independent Author of the Year Lauren Hudson is a Singletary Scholar at the University of Kentucky.


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