U.S. Comptroller General Warns the Nation of Economic Calamity [Fiscal Conservatism Needed Alert]

NewsMax ^ | Aug. 3, 2006 | Dave Eberhart

[RexBeach]

THAT is precisely what a meant!

There was a time in America(before 1965) when people paid their medical bills out of savings.

[yellowdoghunter]

I wonder why this article leaves out the quote about baby boomers being the first generation in America to leave America in worst shape than when they inherited it?

For some reason, that thread was pulled, or one of them was.

[panaxanax]

Good post, thank you. I think Mr. David Walker should visit this site: http://www.brillig.com/debt_clock/

We're already broke and if the government was a business it would have been forced to file Chapter 13 a long time ago.

Does anyone know if there are any other nations on the face of this earth that are so much in debt to other countries?

[GOP_Thug_Mom]

pinging for later

[american spirit]

I noticed he didn't get into the issue of the fedgov's "unfunded liabilities" that surpass $50 Tillion and counting........guess he didn't want to depress us too much.

[Toddsterpatriot]

Good post, thank you. I think Mr. David Walker should visit this site: http://www.brillig.com/debt_clock/

Interesting site. It's wrong, but interesting. Public debt is $4.8 trillion not $8.4 trillion.

Does anyone know if there are any other nations on the face of this earth that are so much in debt to other countries?

How much is our nation in debt to other countries?

[LM_Guy]

SS is not the real problem for the budget, Medicare is 800 pound gorilla!!

[dirtboy]

Medicare is 800 pound gorilla!!

They will raise deductables and eliminate services.

[LM_Guy]

U.S. Treasury statistics indicate that, at the end of 2004, foreigners held 44% of federal debt held by the public. About 64% of that 44% was held by the central banks of other countries. A large portion was held by the central banks of Japan and China. This exposes the United States to potential financial or political risk that either bank will stop buying Treasury securities or start selling them heavily. In fact, the debt held by Japan reached a maximum in August of 2004 and has fallen nearly 3% since then. However, even if both banks cease to buy U.S. treasuries, the U.S. could find new buyers by raising the interest rates they pay.

[JOAT]

Public debt is $4.8 trillion not $8.4 trillion.

Oh I see, you're obviously referring to what is officially 'on the books' not the true indebtedness.

The perennially plundered vaults that were supposed to hold our FICA deductions don't count in government debt calculations for some odd reason...

I wonder how the federales are gonna "pay" for the boomers retirement?

Is that the sound of printing presses being warmed up?

[Toddsterpatriot]

The perennially plundered vaults that were supposed to hold our FICA deductions don't count in government debt calculations for some odd reason...

They do count, just not as "public" debt.

I wonder how the federales are gonna "pay" for the boomers retirement?

Logan's Run? Soylent Green?

[hedgetrimmer]

Bump for later.

[conservativecorner]

Absurd it may be but "Abnsurd" is one I'm not familiar with. There are a myriad of issues that bust the budget including but not limited to your list.

[RightWhale]

The money is being printed in S Kor, 1/3 the printing cost. And, future money will be electronic only, no printing cost. Free money, can't beat that!

[ritewingwarrior]

Actually that is correct. Under the democrats it would be much worse. The liberals claim that Clinton created a surplus. Actually The Clinton administration reported a surplus of $559 billion in its final four budget years. The audited numbers showed a deficit of $484 billion.

http://www.usatoday.com/printedition/news/20060803/1a_coverart03.art_dom.htm

We have to shut down Social Security as an entitlement and change it over to a needs based system. We need to stop funding senseless projects on a federal system. If communities want things, they should fund it out of local taxes.

[Dick Bachert]

A precious metals backed money has kept nations from doing what we've foolishly done here. It is that history that caused OUR founding fathers to ATTEMPT to prevent prevent the current folly and insert a prohibition against fiat money into OUR Constitution.

With few exceptions, do you REALLY think the current crop of populist/socialist morons we elect today know more about NATURAL economic law than the men who put this thing together?

But SOME modern politicians MAY have understood the problem. See below.

---

In early 1983, I wrote Senator Sam Nunn of Georgia
to ask about the redeemability of Federal Reserve
Notes. His reply arrived on March 11 and read (in
part) as posted below.

It would APPEAR that either:
1. Sam Nunn ACTUALLY gets it about what happens when man
(or certain men) play God with “money;”
2. Nunn DOESN’T get it -- and some staffer sent this out
without actually READING it or running it by the boss (in
which case said staffer now works for the DC Sanitation
Department.
3. None of the above. Because nearly every American is an
economic illiterate, what possible harm could it do to send it?
In which case, you economic illiterates who read this will mutter
“So what?” and flip back to MTV.

In any event, for the edification of you non-economic illiterates
out there, here it is.

"Dear Richard:

Thank you for your letter requesting information on
redeemability of Federal Reserve Notes for lawful
money. I have enclosed information from the
Congressional Research Service that I hope will be of
assistance."

The enclosure was 4 pages from something called
"The Gold Standard: Its history and record against
inflation. A Study prepared for the use of the
Subcommittee on Monetary and Fiscal Policy of the Joint
Economic Committee, Congress of The United States." It
was printed September 18, 1981. I was sent only the
England and U.S. portions of the study. What they
revealed was most interesting. From the England study:
(Emphasis added)

"England has had 350 years of experience with
various forms of the gold standard. She first went on
the gold coin standard, de facto, in 1717. This was
done by Sir Isaac Newton, then Master of the Mint. It
was done by pricing gold at the mint more favorably,
relative to silver, than in the marketplace. An Act of
Parliament in 1816 gave formal recognition to this
'new' monetary standard that had been operational for a
century in promoting England to a world power.

"Between 1797 and 1821, England temporarily
suspended the gold standard because of the economic
disruptions of the Napoleonic Wars. With no gold
backing to the currency, the supply of money had no
discipline except that imposed by the Board of
Governors of the Bank of England (analogous to our Fed
of today).

The result was that wholesale commodity prices shot up
nearly 50% in 4 years-a momentous inflation.

The 'Bullion Committee' was formed by parliament
to investigate. Their findings read in part as follows:

'The suspension of cash payments has had the
effect of committing into the hands of the Directors of
the Bank of England, to be exercised by their sole
discretion the immediate charge of supplying the
country with that quantity of circulating medium which
exactly proportioned to the wants and occasions of
the Public. In the judgment of the Committee, that is
a trust which it is unreasonable to expect that the
Directors of the Bank of England should ever be able to
discharge. The most detailed knowledge of the actual
trade of the Country, combined with the profound
Science in all principles of Money and circulation,
would not allow any man or set of men to adjust, and
keep always adjusted, the right proportion of
circulating medium in a country to the wants of trade.'

"Gold convertibility of the currency was resumed
in 1821. It is a matter of record that wholesale
prices came back down immediately to the level
preceding the hiatus in the gold standard.

"England was again off the gold standard between
1919 and 1925. When she resumed gold convertibility it
was on a gold bullion standard where she remained until
1931, when she went off the gold standard altogether in
the midst of the Great Depression."

Under the United States, we find the following:

"The long period of the gold standard in the
United States was not an economic nirvana. The most
severe inflationary period reaching completion under
the gold standard was from 1897 to 1920. But from
trough to peak, the average annual compound rate
was 5.4%--mild by present experience. And most of this
occurred from 1914 to 1920 when the European war and
its aftermath bore so heavily on the domestic economy.
If we look at the period between 1897 and 1914, the
average annual rate of inflation was 2.6% -- enviable
from the perspective of today."

by
DICK BACHERT (circa 1993)
Norcross, GA
richard.bachert@comcast.net

[Toddsterpatriot]

A precious metals backed money has kept nations from doing what we've foolishly done here.

Which is what?

And you didn't answer my question. A gold backed currency will save us?

Do you claim inflation and deflation didn't exist under the gold standard?

[panaxanax]

"The money is being printed in S Kor, 1/3 the printing cost."

Is that true? If so, that might explain how their cousins to the north are printing near-perfect counterfeit U.S. 100 dollar bills.

[taxed2death]

....and no one knows how much the 20 ton invisible stealth elephant wearing blue tennis shoes in the tea room costs.....................the black budget is?

[upcountryhorseman]

What the government will probably do: Print more money and
loosen credit, on and on!