[Neil E. Wright]

Can some FReeper economist translate this to plain English for me??? I know the country is in deep doo-doo, but can someone tell me just how bad its becoming?

FREEDOM!

[Jim Robinson]

We’re in a heap of sh!t.

[musicman]

bookmark.....(in case you get an answer to your question!!)

[Deagle]

Which brings up the point - just what is Wall Street betting on these days? Mostly foreign investments? It surely can’t be on the US’s ability to overcome corruption by both the government and corporate entities. The problems of both would overwhelm even the most optimist of investors.

So... I would guess that those that have money are just trying to make more before the apocalypse... or at least our US version of the same... That would explain why only the markets are advancing while the rest of society is suffering.

[WKUHilltopper]

“Increasing levels of government debt relative to the size of the economy can lead to higher interest rates, which inhibit capital formation and productivity growth — and might even put the current economic recovery at risk.”

No —— Sherlock! You mean the same debt you insisted we take on? You’re nothing but a thug and criminal.

[Attention Surplus Disorder]

May I humbly suggest you read it a time or two more and try again to understand it? Yes, it means we are hosed.

Karl has a way of being fairly blunt about these things, but IMO, folks need to work a little at understanding the magnitude of what the US is looking at, financially and fiscally.

Just as a point of reference: We have this serious oil spill in the Gulf. And it’s inarguably a really crappy situation. Damage estimates are of course premature at this point, and oil hasn’t hit the shore at this exact minute, though it looks like it will, ultimately.

But the kinds of numbers being thrown around are $10 billion, $20 billion worth of damage that BP may ultimately have to pay out. Let’s double that, $40 billion.

We paid out $787 billion and another $832 billion (IIRC) in the two installments of TARP. 40 times what may happen, damage-wise, in the Gulf. Or if we forego the doubling I did in the calcs, just over 1% of what we paid the banksters. Where’s the screaming?

[DB]

Our days are numbered.

[Visceral]

Thanks for the article.

” and as Greece has discovered that expiration is likely to come with little or no warning “

So this can happen over night, like the September 2008 event?

[familyop]

As Treasury bonds become riskier investments, yields (interest rates) will soon skyrocket. No one knows exactly when the run on bonds will occur. Those drastic interest rate hikes will spread to local governments and private business. ...more waves of foreclosures. As business slows further, sooner or later, stocks will fall hard, causing more businesses to fail. The number of unemployed will go enormously higher.

Raising property taxes and taking a national sales tax won’t work any more than such actions did in other countries. ...business killers. Revenues will shrink to a small portion of what they are now. When the federal, state, county and city governments finally discharge large percentages of employees, it will be too late. Default will no longer be de facto default. It will be undeniable.

The government can’t simply inflate its way out of this one. There’s virtually no heavy manufacturing to raise taxes on for that. Worthless dollars are every bit as worthless to government employees as to anyone else.

So you see that neither piggish political party, full of rhetoric and money, will save the day. Both are far too piggish and more interested in pandering to government employees and foreign partners than hard working men.

Enjoy the ride.

[RebelTex]

Think of it this way. You had a lot of bills to pay and you were juggling them every month, alternating those that got paid while incurring heavy late charges and higher interest rates.

So you borrowed enough from the local loan shark to pay off all your bills and now you only have to pay the loan shark - but his interest rate is even higher and penalties are much harsher. But what the heck, the improved cash flow now lets you take out new loans and buy a new car and house, which you do.

Now, your boss has just fired you, and the loan shark won’t settle for just kneecapping you.

Does that clear things up for you?

[abigailsmybaby]

Those are almost hockey stick graphs.

[Liz]

[sickoflibs]

RE :” This is where your problem begins. While government deficits have varied over time, during the 2000 decade they became both embedded in the economy and at a high and continuing level of about 4-5% of GDP. That is, the so-called “recovery” in 2003-2007 was false; it did not consist of organic demand from the marketplace, but rather it consisted of government's fraudulently inflated demand. Contrast this with the 1990s when private demand rose fast enough that the government was able to slowly withdraw stimulus via deficit spending, to the point that it actually approached zero! That's REAL economic growth......The Obama administration estimates budget deficits will total $5.1 trillion over five years and hit a record $1.6 trillion in the year ending Sept. 30. The $1.4 trillion deficit in 2009 was equal to 9.9 percent of gross domestic product, the largest share since the end of the World War II. ...That cannot happen without the economy undergoing the very adjustment in matching of output and final private demand that the government has spent ten years trying to avoid.

This is the ugly truth that Bernanke doesn't want to speak of, but he knows it to be true. But neither he, nor the government budget folks, are willing to come out and tell the people the truth - since 2003 we have managed to compound a 58% distortion to our $14 trillion GDP!

To say that the adjustment occasioned by withdrawal of that support would be catastrophic would be the understatement of the year. We never got anywhere near this level of distortion in the 1920s and 30s - the distortion reached about 25%, top to bottom. The adjustment produced what we call The Great Depression.”

Look like we are following the Greece model of bankrupting the country. Go back to 2008 when the two parties picked two liars to tell us how more candy(debt) would fix our spending and debt problems magically, and the bigger spender and liar (Obama) won. Now he has hired a national debt commission to tell us the bad news, we really will have to pay for his (as well as Bush's) gross and wasteful spending, something he repeatedly told us wouldnt happen. They promised us it was free (to us.)

[Gilbo_3]

well neil, im no economist...but its apparant that fedgov has created an uncontrollable monster, and it now roams the countrside...

at some point it will return and feed...

[724th]

Wait a minute! Those graphs look loke hockey sticks!

[concerned about politics]

People might want to consider getting out of the cities. There's a lot of leftists who are going to want their checks. When they don't show up in the mail, they're going to decide to "take what is rightfully theirs." I.E., their neighbors goods.

The politicians, in exchange for their own power and privilege, said if the voters bowed down and worshiped them, all the glories of the earth would be theirs - for free. They believed them.

(BTW, during the millennium of peace, there are no politicians to turn neighbor against neighbor, country against country, or kingdom against kingdom.)

[OB1kNOb]

Can some FReeper economist translate this to plain English for me??? I know the country is in deep doo-doo, but can someone tell me just how bad its becoming?

“Achieving long-term fiscal sustainability will be difficult, but the costs of failing to do so could be very high,” Bernanke said in remarks prepared for a speech today to a White House commission on the budget deficit.

Oh stewardess! I speak government jive. If you'll allow me...

"He say it's impossible to keep spending uncontrollably like we are doing, but the government will continue until it all collapses and the fecal matter forecfully comes into contact with the air circulator blades."

[PatriotGirl827]

bookmark for later read

[surfer]

bad? it was bad a couple years ago.

horror show...that was last year...

financial Armageddon - you are witnessing history make sure your children learn the lesson and pass it on.

[Thumper1960]

bump