As the United States national debt reaches parity with total annual GDP, President Barack Obama continues to preside over a record level of deficit spending by the federal government. He has just sent to Congress a proposed $3.73 trillion budget for FY 2012, while forecasting a record $1.65 trillion deficit for the current fiscal year. Earlier, the Congressional Budget Office projected that the current deficit would reach at least $1.5 trillion. These figures mean that America remains trapped with unsustainable structural mega-deficits, and that more than 40 percent of everything the U.S. federal government spends is financed with borrowed money.
As I have commented on before, this level of government indebtedness just cannot be sustained, and will lead to catastrophic repercussions. While the politicians in Washington, particularly in the Obama administration, pay lip service to the need to "rein in" this profligate public spending, nobody believes that they are serious. The president's claim that he "plans" to reduce the deficit cumulatively over ten years by just over a trillion dollars is an utter farce, since even by the most optimistic forecasts this would leave a combined deficit over the decade of more than ten trillion dollars.
The problem, however, is not uniquely one of the Obama administration and the Democratic Party. The Republicans, who left for Obama as an inaugural present in 2009 a first-ever annual deficit to exceed a trillion dollars, are as intellectually bankrupt as are their adversaries on the other side of the aisle. The GOP is equally bereft of ideas on how to control this raging fiscal train wreck, offering little more than worn-out cliches such as reducing taxes, as though that would not further exacerbate the federal government's structural mega-deficit.
What we are witnessing is not only an economic and fiscal calamity in the making. It is as much a display of political dysfunctionality and moral cowardice as it is of inept fiscal policy. Which leads to the melancholy conclusion that it will not be the political echelon in Washington that ultimately imposes budgetary discipline on public spending. Increasingly likely is a doomsday scenario, in which the bond vigilantes, well practiced already with their punishing assaults on the credit ratings of Greece, Ireland and now Portugal, unleash the full fury of the market place on Uncle Sam. When that fiscally apocalyptic moment arrives, not even the impressive weight of political inertia that resides in Washington DC will be able to impede a sovereign debt crisis in the United States that will not only cripple the nation's economy with devastating effect; it will likely dispossess the next generation of Americans of their future.
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Right now there is lots of cash in the economy without use because there is no demand for goods and services. Why not use some to pay down the deficit. No, we can't piss off the wealthy because they won't invest in America. Yeah. Right. They are already investing in the emerging economies and want to have more cash for that (reduce taxes here so there is more money for investing in China). The only way they will invest in America is to create demand and jobs here. Cutting spending is a good way to eliminate that demand. But if we spend, we should obviously make it jobs-efficient. And that is a different issue than tax incidence. One of the ideological games to stop is the conflation of taxes with spending effectiveness (the old "starve the beast" theory). That being said, is it likely that the ideological games will quit? Not with a Republican Party committed primarily to destroying the Obama Presidency (can't have job creation before 2012) and not to the American economy.
Once a country (the US and American people) owes 350% of its income, it has ceded control to those with real capital. There is no escape - raise taxes and cut spending now.
That they should do a 180 once their favorite budget buster is assured shows that either they know the media's not biased or they're masochistically begging to be humiliated and the media, like the sadist in the old joke, says "no."
What point are you trying to make by quoting Obama's slogan? That because it's a little trite, Obama must be begging to be humiliated as much as McConnell?
In 1960 the total money supply of the US was only $200 billion ( a fraction of the GDP), since then we have created over $12 trillion as debt via Fractional Reserve, that means virtually every dollar in circulation was loaned into existence, it is all DEBT.
Obama's SOTU suggested "innovation" will get us out of debt, but we have just experienced 50 years of unprecedented innovation and 4x increase in productivity - and it has resulted in debt not prosperity. When the only money to represent productivity can only be created as debt, the more your economy grows, the more debt you must create.
END FRACTIONAL RESERVE FOR THE PROFIT OF BANKING CORPORATIONS. RESTORE CONSTITUTIONAL MONEY.
http://public-consultation.org/exercise/
The major contributing factor is the plutocracy. In the case of America, the plutocracy is comprised of the rich and powerful (both individuals and corporations) and the two major political parties. That is the triumvirate which is responsible for the creation of this pending catastrophe.
For anyone who actually pays attention, and who avoids the media plutocratic participants, will figure this out. Remember that the major media which controls 90% of all news, both print and broadcast, is owned by about seven companies with interlocking Boards. They survive on advertising which is primarily from the other oligarchies (i.e. big energy, food, the MIC, banking, etc.). They are unlikely to tell any truth which could harm the interests of the hands that feed them.
Politicians in both parties are essentially equally supported by the other members of the plutocracy, and, so, they also refuse to bite their keepers.
And, yes, we are on the way to becoming like Greece, Portugal, England, Ireland, et al. This is because our politicians will NOT EVER take the necessary steps to overcome the crisis on any rational basis. They can’t. Their hands are tied by the political power structure.
If you think that's a great idea, why don't we set up subscriptions for conservatives favorite spending programs like the wars in Iraq and Afghanistan?
http://en.wikipedia.org/wiki/United_States_Department_of_War
Articles like that may have good intentions but its doomsday mood is counterproductive...
All we need is a decade of a leaner prudent lifestyle...
Ferrari should go bankrupt but Lexus (..especially that $ 35K beauty ...) should do well......
http://www.google.com/publicdata?ds=wb-wdi&met=ms_mil_xpnd_gd_zs&idim=country:USA&dl=en&hl=en&q=military+spending+as+percent+of+gdp
What has grown unabated since the '40s are entitlement spending which now exceeds 10% of GDP and is forecast to approach 20% by the 2050's.
http://www.heritage.org/budgetchartbook/entitlements-historical-tax-levels
Where defense spending has remained less than 10% of GDP since the Korean War entitlement spending is skyrocketing at unsustainable rates.
http://www.heritage.org/budgetchartbook/defense-entitlement-spending