Hmm...
Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.
Posted on 12/23/2009 7:35:55 AM PST by Shellybenoit
The United States Economy has become like those sub-prime mortgages that almost brought down the banking system last year. We have borrowed more than we can afford but as long as interest rates stay low, we will be able to make payments. Once rates go up, the federal government will have to "default on its homes."
Even the NY Times is predicting economic problems for America:
... With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this year, even if annual budget deficits shrink drastically. Other forecasters say the figure could be much higher.
In concrete terms, an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan.
The potential for rapidly escalating interest payouts is just one of the wrenching challenges facing the United States after decades of living beyond its means.
The White House estimates that the government will have to borrow about $3.5 trillion more over the next three years,and that doesn't even include the huge amount of short-term debt that was issued during the financial crisis that the Treasury will have to refinance, or roll. Treasury officials estimate that about 36 percent of the government’s marketable debt — about $1.6 trillion — is coming due in the months ahead.
The United States isn't the only country in a precarious position, for example Dubai collapsed under its own debt just a few weeks ago. It begs the question, is 2010 the year that governments across the world will run out of money?
(Excerpt) Read more at yidwithlid.blogspot.com ...
mark
When the government decided that everyone should get a mortgage for a home, we ended up with the housing bubble that destroyed dozens of companies. Now the government has decided that everyone has a “right” to “affordable health care”. Be prepared for an ever bigger bubble to burst. And this one will destroy thousands of companies.
Yep. Big, big reset on the horizon. Probably will come home as a series of bubbles bursting that will lead to a huge collapse of the dollar. I'm far from a "doom and gloomer", but I'd say it's all but certain now....
This crisis is NOT a crisis caused by one particular type of loan/debt... it was caused by a TSUNAMI of ALL types of debt... IE: mortgage debt, home equity debt, consumer credit debt, credit card debt, auto loan debt, commerical real estate debt, municipal debt, corporate debt and on and on... whether they were prime, subprime, alt-a or XYZ-type loans, they ALL contributed to the tsunami of debt.
Subprime was simply the first link to break in an extraordinarily over-stretched chain of debt. Alt-A Option ARM loans are now defaulting at the same rate or at an even higher rate than subprime... Prime loans are not far behind... we’ve only seen the tip of the iceberg in prime foreclosures. Commercial real estate loans are expected to implode in 2010, as are municipal bonds.
ANY loan that was taken out when the market was grossly over-valued was a bad loan. (stop for a minute and let that sink in). If a “prime” borrower with perfect credit, full income documentation and a 20% down payment bought a house (or a commercial building) that was 40% over-priced, then that too was a bad loan.
In the U.S., consumers owe over 11 TRILLION dollars in home mortgage debt and 2.6 Trillion in other consumer credit debt... for a total of around 14 Trillion.
Americans took out and spent over 1 Trillion dollars in home equity loans from 2000 - 2007. They spent it on clothes, cars, boats, RV’s, 2nd homes, nannies, private schools, fine wine, fabulous vacations, etc. That home-ATM has been cut off... which is playing a huge part in unemployment...
Those debt-fueled jobs are not coming back any time soon and higher taxes, more regulation, Obamacare, Cap and Trade and Card Check will only make unemployment worse!!
One Trillion (ONE) is $1 per second for 32,000 years... without interest! Noodle that one for a minute.
Individuals are broke, cities are broke, states are broke, the Federal Gov’t is broke!
Until we understand the scope of this debt crisis, we are not going to be able to deal with it... assuming there is any way to deal with it at all... it is exponentially bigger than people realize.
if and when a collapse occurs, you can bet the media and the occupants of the white house will blame capitalism along with the prior occupant of the white house.
No problem! Kick the can down the road! I will be (a) Out of office (b) Dead when the debt comes due. Besides, people have been saying things like this for years and it hasn't happened yet.
It's called 'The Bow Wave Effect." As long as you keep charging forward the problem is kept at bay. Go faster and faster. Today's million dollar problem is absorbed by next year's billion dollar debt, which in turn made small by the future's trillion dollar debt. Just don't stop or that bow wave of debt will come crashing down on you and sink your ship.
Don't stop at any cost!
Hmm...
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