We are not even 1/4 of the way through this crisis.

We may be in a delaying pattern but, we still have the major pain to bear yet.

Unlike the Great Depression, we have debt, interest on debt, and a collapsing dollar to deal with. We also are continuing to use the policies that created this crisis and as a result, making things worse. Again, we may delay the day of reckoning by taking on more debt but, the interest on that debt is going to kill our ability to pay for other things we want and need.

Currently 40% of the budget is covered by borrowing. Currently defense spending is about 20% of our budget. That means that if you totally ended all defense spending, we would still need to borrow 20% of the budget. For those who think cutting defense spending (definitely needed) will help us get out of this mess, forget it. The crisis is too great when you can eliminate the entire defense department and still be going in the hole.

This is a totally unsustainable government and they were told this by their own government accounting department for 4 years before this crisis even hit.

Quote: (from the GAO clear back in 2007)
The federal government’s financial condition and fiscal outlook are worse than many may understand…..

….the federal government’s current fiscal policy is unsustainable.

……unsustainable path will gradually erode, if not suddenly damage, our economy, our standard of living, and ultimately our domestic tranquility and national security.

http://www.gao.gov/new.items/d07362sp.pdf
=====================

In 2008 they said

quote
As shown in figure 1 below, our updated simulations
continue to show escalating and persistent deficits that illustrate the longterm
fiscal outlook is unsustainable. The federal government faces large
and growing structural deficits driven primarily by rising health care costs
and known demographic trends. Furthermore, these simulations do not
yet reflect recent actions taken by the federal government to support the
financial sector.

http://www.gao.gov/new.items/d0994r.pdf
===================

Again, unsustainable and yet, we are not only continuing the policies but increasing the unsustainable nature of those policies. No wonder the world is abandoning the dollar.

Being realistic and recognizing what the world is saying and doing to the dollar and about our government is not being paranoid. Our own government GAO and CBO has been and continues to issue the warnings of our unsustainable path.

We will survive and rebuild the nation in a decade or so. We may even be stronger than we have been for decades as this has been building since the 1960’s and esp. since 1971. It has taken larger and larger bubbles to delay the depression that is here or coming and Congress not only hasn’t done anything to reform the policies causing it, but are expanding them.

- JanPaul

Related Posts:

• The U.S. is past paying debts back.
• Obamacare will bankrupt country
• Re. Speech about the state of the union
• Regarding the “ratio of debt to GDP” and other data.
• We have to remember there is little we can do to control costs. We import too much of our medicines and supplies.

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