Posted on 08/19/2009 6:41:18 PM PDT by Red in Blue PA
To understand this threat, we need to look at where we stand historically. If we leave aside the war-impacted years of 1942 to 1946, the largest annual deficit the United States has incurred since 1920 was 6 percent of gross domestic product. This fiscal year, though, the deficit will rise to about 13 percent of G.D.P., more than twice the non-wartime record. In dollars, that equates to a staggering $1.8 trillion. Fiscally, we are in uncharted territory.
Because of this gigantic deficit, our country’s “net debt” (that is, the amount held publicly) is mushrooming. During this fiscal year, it will increase more than one percentage point per month, climbing to about 56 percent of G.D.P. from 41 percent. Admittedly, other countries, like Japan and Italy, have far higher ratios and no one can know the precise level of net debt to G.D.P. at which the United States will lose its reputation for financial integrity. But a few more years like this one and we will find out.
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Slowing them down will require extraordinary political will. With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can’t come close to bridging that sort of gap.
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Our immediate problem is to get our country back on its feet and flourishing — “whatever it takes” still makes sense. Once recovery is gained, however, Congress must end the rise in the debt-to-G.D.P. ratio and keep our growth in obligations in line with our growth in resources.
Unchecked carbon emissions will likely cause icebergs to melt. Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar’s destiny lies with Congress.
(Excerpt) Read more at nytimes.com ...
That is definately the problem and if the debt is not paid down and Obama and Congress don’t stop spending; we will be in one mother of a depression. As long as they over spending and printing money to cover it; we will go down.
Also, pay all your debts as much as you can. You will thank yourself for it.
It’s pretty bad when your advisors call your plans disastrous.
Isn’t Buffett an Obama advisor like Paul Volker? Why’s he telling us?
Indeed he is an advisor. The legs of the table are being removed one by one.
When is shooting yourself in the foot an act of suicide?
When your foot is in your mouth.....
More likely only a few more months. The myth that we can have government spend/borrow our way out of a recession has become painfully clear to all of the Americans out of work. Obama and Congress continue to pretend that fattening government bureaucracy is the solution to stimulating the economy.
Buffett is first and foremost what Founder John Adams derisively called a "money-getter." That is, the acquisition of wealth is his reason for living. He is Scrooge McDuck personified.
If he is now telling you what to expect, you can rest assured that he is well prepared to profit from your response. Follow the money and draw your own conclusions.
Warren who?
Buffett sends one across his meassiahs bow.
When it comes to the Buffetts, I prefer Jimmy.
I have no debt. The burning question on my mind is what to do with my cash assets — leave them as-is (in CD’s), convert to gold, a little of both? Gold is ~$940/oz so it’s not an easy decision. Silver doesn’t look like it’s at it’s peak, though.
I believe we are ALREADY in one mother of a depression.
What galls me is that the old prick practically campaigned for Obummer. And now gives a mealy-mouthed criticism of him. Just a tad late there, Mr. Buffet!
When you campaigned for him you had to know in your heart that he had never managed so much as a hotdog vending pushcart! By WHAT assinine credentials did you in your wildest hallucinations imagine that he could manage the most difficult job on earth?!!!
Warren Buffet.
I’m in the same situation ... I have some in gold, the rest in cash assets, but that doesn’t seem wise long term, as it seems to me that we may be in for some series inflation at some point, but hey, who knows, this thing is hard to figure out. What this evil out of control gubmint is doing puts us in uncharted territory.
I don’t find Buffett particularly credible on anything anymore.
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