America’s Debt – Ticking Nuclear Bomb!

• It gives me no great pleasure to say this: America is Bankrupt ! Not a matter of whether this ‘Nuclear’ debt time bomb will explode. When it will, may largely be speculation at the moment. But some would put this Armageddon Crisis Explosion in 2009. Some like Gerald Celente, Bob Moriarty and GEAB are even more ‘optimistic’ : by March 2009 ! Collapse within 90 days, Wow! This is going to be a barrel of fun!??
   
• Washington Post has this to say recently : U.S. debt Expected To Soar This Year :
    
  …the national debt is projected to jump by as much as $2 trillion this year, an unprecedented increase that could test the world’s appetite for financing U.S. government spending.
   
  For now, investors are frantically stuffing money into the relative safety of the U.S. Treasury, which has come to serve as the world’s mattress in troubled times. Interest rates on Treasury bills have plummeted to historic lows, with some short-term investors literally giving the government money for free.
   
  But about 40 percent of the debt held by private investors will mature in a year or less, according to Treasury officials. When those loans come due, the Treasury will have to borrow more money to repay them, even as it launches perhaps the most aggressive expansion of U.S. debt in modern history.
   
  With the government planning to roll over its short-term loans into more stable, long-term securities, experts say investors are likely to demand a greater return on their money, saddling taxpayers with huge new interest payments for years to come. Some analysts also worry that foreign investors, the largest U.S. creditors, may prove unable to absorb the skyrocketing debt, undermining confidence in the United States as the bedrock of the global financial system.
   
  While the current market for Treasurys is booming, it’s unclear whether demand for debt can be sustained, said Lou Crandall, chief economist at Wrightson ICAP, which analyzes Treasury financing trends.
   
  “There’s a time bomb in there somewhere,” Crandall said, “but we don’t know exactly where on the calendar it’s planted.”
   
• Of course we all know that the Federal Government, Congress and Treasury are run by Wonderful Corrupt Idiots ! They make Charles Ponzi look good.
     
• So the federal government is bankrupt ! What about the 50 states? How are they doing ? In : STATE BUDGET TROUBLES WORSEN, McNichol and Law writes :
    
  States are facing a great fiscal crisis.  At least 44 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well.  ……

• As a result, the states  :
    
  ….they can draw down available reserves, they can cut expenditures, or they can raise taxes.  States already have begun drawing down reserves; the remaining reserves are not sufficient to allow states to weather a significant downturn or recession.  The other alternatives — spending cuts and tax increases …
   
• Most states cannot run a budget deficit or borrow to cover their expenditures. Spending cuts mean that services will be drastically reduce :
   
  For example, at least 19 states have implemented or are considering cuts that will affect low-income children’s or families’ eligibility for health insurance or reduce their access to health care services.  Programs for the elderly and disabled are also being cut.  At least 18 states are cutting medical, rehabilitative, home care, or other services needed by low-income people who are elderly or have disabilities, or significantly increasing the cost of these services.
   
  At least 20 states are cutting or proposing to cut K-12 and early education; several of them are also reducing access to child care and early education, and at least 26 states have implemented or proposed cuts to public colleges and universities.
   
  In addition, at least 34 states have proposed or implemented reductions to their state workforce.   Workforce reductions often result in reduced access to services residents need.  They also add to states’ woes by contracting the state economy.
   
• However, despite all the planned cut backs, it does not look like it will be sufficient to balance the budget. It will add greatly to the hardship of the people. So state governors are asking for a bailout of US$ 1T. U.S. governors seek $1 trillion federal assistance :
    
  Governors of five U.S. states urged the federal government to provide $1 trillion in aid to the country’s 50 states to help pay for education, welfare and infrastructure as states struggle with steep budget deficits amid a deepening recession.
   
  The governors of New York, New Jersey, Massachusetts, Ohio and Wisconsin — all Democrats — said the initiative for the two-year aid package was backed by other governors and follows a meeting in December where governors called on President-elect Barack Obama to help them maintain services in the face of slumping revenues.Gov. David Paterson of New York said 43 states now have budget deficits totaling some $100 billion as tax revenues plunge.
   
• 2009 is beginning to look like the year of BAILOUTS. Now everyone and their pet parakeet is asking for a bailout. So, who is going to bail America out ?? We are in zombie land. The stock market is rallying. Don’t worry, be happy ! Let us continue to believe that America will never ever collapse!

end

Advertisement