Posted on 08/09/2009 5:35:26 PM PDT by Clintonfatigued
The unprecedented, improbable and indeed almost unimaginable global financial crisis has virtually put an end to the comfortable notion that American and Western capitalism would dominate the world economy. In turn, the financial meltdown threatening another Great Depression has been the rationale for a phenomenal expansion of government spending to prop up demand and fend off economic disaster.
As a result, the deficit quadrupled from $459 billion in 2008 to $1.85 trillion this year. It has gone from 3.2% of gross domestic product to 13.1%, twice the post-World War II record of 6% in 1983 under President Reagan. What's more, the debt surge is unlike the one that accompanied WWII in that it will not be temporary.
The nonpartisan Congressional Budget Office reckons that the deficit will run for a decade and will still exceed $1.2 trillion in 2019. By that time, the United States will have virtually doubled its national debt, to over $17 trillion. Then, after 2019, we get another turn of the screw as the peak waves of baby boomers move into their retirement years and costs soar for the major entitlements, Social Security and Medicare.
At 41% of GDP in 2008, the accumulated federal debt will rise to 82% by 2019. One out of every six dollars spent then by the feds will go to interest, compared with 1 in 12 dollars last year. These out-year budgets will require an increase in everyone's income taxes, raising federal income taxes an average of $11,000 for families, a hike of 55% per household - a political impossibility.
The Government Accountability Office estimates that by 2040, interest payments will absorb 30% of all revenues and entitlements will consume the rest, leaving nothing for defense, education or veterans' pensions.
(Excerpt) Read more at nydailynews.com ...
The numbers are just staggering. Also, because Republicans squandered their credibility on deficits years ago, they have been unable to offer effective opposition.
The American people are becoming more savings and thrift oriented now. Ironically, this is one of the reasons the economy has been slow, as credit-based spending has been a fuel of economic growth in the past.
ping
Simple solution. Cut spending. The DC Beltway crowd is going down hard.
Daily News - Zuckerman - amazing.
Yeah, cut spending. But I think it is going to have to go a lot deeper than that. A lot of these “entitlement” programs are going to have to be ended. What happens then?
Actually, it’s probably much worse.
Because a decent chunk of our T-bills are now short-term instead of long term. There appears to be a lot of “waiting and watching” going on by those buying our debt.
Seems to me they are waiting for the inevitable spike in interest rates and that will throw all the numbers off.
Gonna be ugly...
someone is going to use the expression
“Simple solution. Cut spending.”
It’s a question of how. Interest on the debt can’t be controlled and a lot of entitlement spending is mandatory. Laws will have to be changed to achieve real cuts in spending.
What was that saying--'No society has every survived a tax rate greater than 25%'...?
Our government has become an aging trophy wife--old, ugly, useless and extravagent. Time to dump her for the new model.
Down Size the Federal Government to only a military and strategic function.
Get rid of everything else, including the dreaded IRS ( only state taxes), and the idiot federa; ourt system ( reduce it to skeletal status, and make Congressional elected reps PAY to be our representatives, end all of their benefits.
END ALL FEDERAL TAXATION.
“The unprecedented, improbable and indeed almost unimaginable global financial crisis has virtually put an end to the comfortable notion that American and Western capitalism would dominate the world economy.”
This would be a true statement if we lived in a capitalistic, free-market system.
We don’t. Not since 1913 when the “Federal Reserve Act” implemented a central bank in America, much against the warnings of our Founding Fathers.
It has been their monetary manipulation — to favor the profit of the banksters — that has crippled the free-market system and market-based capitalism.
If the average American citizen wrote hot checks like our federal government.
They’d be in jail.
Keep up the pressure y’all. Town halls, Tea parties, faxes, emails, letters, phone calls.
Tell your representatives and senators.....
YOU ARE SERVANTS OF THE PEOPLE, NOT ROYALTY.
Or something equally radical. You are right: the situation is become impossible. We are in danger of becoming Venezuela.
Or something equally radical. You are right: the situation is become impossible. We are in danger of becoming Venezuela.
and taxes (this time cut both). I believe you're right. That's the new paradigm. That's where consumers (and voters) are headed.
We may well achieve third world status as barky wants.
Well, no surprise here. You could see this economic train barrelling down the tracks as soon as Obama put through his Porkulus bill.
But it is, indeed, a major surprise to see that Mort Zuckerman, a major Democrat player and big-time donor, and the Daily News, which is reliably liberal, would come out with a story like this AND BLAME IT ON OBAMA.
No “Bush’s fault” here, even though, to be honest, Bush was a big spender and was partly responsible for the recent mess with his GM bailout and his TARP nonsense. True, Bush was suckered by Paulson and Obama. But putting the blame squarely on Obama and letting Bush entirely off the hook is remarkable for a liberal source like this.
LOL! However, Americans would be better off viewing government --- any government --- as a necessary evil that should be minimized as much as possible.
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