this will not end well

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  • peb
    Papist and Texan
    • Feb 2004
    • 14281

    this will not end well



    The White House had warned that the deficit for the 2010 fiscal year could swell to 1.555 trillion dollars, eclipsing the prior year's record of 1.415 trillion dollars due to massive spending to stimulate recovery from the worst recession in decades.

    I guess the second problem with a stimulas package that delayed most the spending until after the recession is that the effects will drag on and on. 12% of GDP, completely and utterly unsustainable.
    The only question is, when will the bond markets put an end to it all? If there is one thing we have learned in the last couple of years, no entity maintains control of itself when its debt burden becomes too large. The democratic desires of the people will mean very little in the not too distant future. The desires of bond investors will control our politics.

    I strongly recommend the following paper:

  • Captain Blight
    Banned
    • May 2008
    • 7648

    #2
    Re: this will not end well

    Audit the Fed. Today if not sooner. We deserve to know the true state of our finances.

    Comment

    • peb
      Papist and Texan
      • Feb 2004
      • 14281

      #3
      Re: this will not end well

      Originally posted by Captain Blight
      Audit the Fed. Today if not sooner. We deserve to know the true state of our finances.
      I have no problem with a public auditing of the fed, but they are actually quite open with most of their business. The problem is not the Federal Reserve, it is the federal government. The Fed is, at worst, an enabler.

      Comment

      • Kaa
        Wanderer
        • Sep 2006
        • 13503

        #4
        Re: this will not end well

        No, I don't think it's going to be pretty...



        Kaa

        Comment

        • peb
          Papist and Texan
          • Feb 2004
          • 14281

          #5
          Re: this will not end well

          Originally posted by Kaa
          About the only dispute I have with your article is the line

          "The makings of a debt-trap or debt-spiral are in hand". The makings have likely come and gone, it is likely we are in the debt-trap now. In the US, it is hard to see how we can cut 10% of government spending, cut back social security and medicare obligations, while other industrial countries take similiar drastic measures. But make no mistake, the bond markets will eventually reflect this.
          I hate to sound like a doom and gloom guy, but we may have just witnessed the last (or maybe one of the last) times investors flocked to US treasuries when they thought they needed safety.

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