Many reasons our country is in trouble.

From the Drudge Report this morning……

Our illustrious VP Joe Biden says and I quote “We have to spend money to keep from going bankrupt”.

VP Joe Biden told people attending an AARP town hall meeting that unless the Democrat supported healthcare plan becomes law the nation will go bankrupt, and that the only way to avoid that fate is for the government to spend more money.

Here’s another dose of reality from the Congressional Budget Office (posted on Drudge also):

http://cboblog.cbo.gov/?p=328

Something’s gotta give and it won’t be pretty.

Scary thing is, he’s right. If you don’t spend, retail suffers less earnings, more layoffs and more inventory meaning less orders, less transport and manufacturing etc, etc etc its a ridiculously vicious cycle that won’t stop until the government prop is removed and we truly see where we are.

What Economy? There’s Nothing Left to Recover by Paul Craig Roberts

There is no economy left to recover. The US manufacturing economy was lost to offshoring and free trade ideology. It was replaced by a mythical “New Economy”.

The “New Economy” was based on services. Its artificial life was fed by the Federal Reserve’s artificially low interest rates, which produced a real estate bubble, and by “free market” financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fradulent financial products.

The real economy was traded away for a make believe economy. When the make believe economy collapsed, American’s wealth in their real estate, pensions, savings collapsed dramatically while their jobs disappeared.

The debt economy caused Americans to leverage their assets. They refinanced their homes and spent the equity. They maxed out numerous credit cards. They worked as many jobs as they could find. Debt expansion and multiple family incomes kept the economy going.

And now suddenly Americans can’t borrow in order to spend. They are over their heads in debt. Jobs are disappearing. America’s consumer economy, approximately 70% of GDP, is dead. Those Americans who still have jobs are saving against the prospect of job loss. Millions are homeless. Some have moved in with family and friends; some are living in tent cities.

Meanwhile the US government budget deficit has jumped from $455 billion in 2008 to $2000 billion this year with another $2000 billion on the books for 2010. The US government budget is now 50% in the red.

The rest of the article can be found at PrisonPlanet.com. Folks, we are in some serious trouble that no amount of fudging numbers is going to fix. I surely don’t know what the answer is, but I do know the path we are currently treading is not the right one.

Related Posts:

• Debtwatch No. 42: The economic case against Bernanke
• Nothing has fundamentally changed on Wall St or in Washington.
• China’s nowadays is similar to the 1920’s and 1930’s.
• The Consumer Price Index has increased 2.35 % since January 2009.
• The collapse is baked into the cake at this point. So we have two choices.

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