The above graph brings to mind what many Americans have been asking - can the PIIGS (Portugal, Ireland, Italy, Greece, & Spain) financial crisis happen here? Of course the answer is not only yes but it is already happening here - just look @ California & NJ to see that their finances are eerily like Greece's long before Greece was recognized as a problem.
A little over a year ago, @ the request of a member of our group, I addressed this matter with a letter I wrote published in the Courier News - "Residents of NJ would be wise to learn from our similar fiscal problems that caused California's current notoriety & economic deterioration summarized as follows: 1) California's budget deficit has reached $42 billion, 2) 1.4 million productive people have out-migrated from California during the last 10 years, 3) unemployment is the 4th highest in the country, 4) California has the worst credit rating falling below Louisiana's, 5) the state has the second highest foreclosure rate, & 6) the governor is threatening to furlough over 20,000 state employees. NJ is right behind California in all of these categories that are caused in both states by overspending in which government lives on borrowed money that ultimately must be repaid through higher taxes. California has the highest rates for both sales tax & income tax in the nation & once again NJ is just a little lower in each category."
Look @ the slope of the above entitlements growth graph & you can see that you don't have to wait until 2052 before entitlements consume all of our revenue @ current historical tax rates before we have a problem. The blue slope line moves closer to the red historical tax average line every year starting now. As anyone who has ever attended one of Jim Bennett's FairTax seminars will ready recognize the graph does not include interest on the national debt - which will consume all of our revenues by 2040 by itself @ 2008 projected spending-revenue levels, such figures being prior to BO's current spending binge.
How unkind & cruel is it for our elected reps to let the entitlement benefit myth continue - until total collapse of the programs? Equally how delusional are people who are counting on receiving advertised government benefits including those recently promised by the healthcare reform legislation.
For decades about three quarters of our federal budget has been for what is really "unkind benevolence" - turning Federalist Paper #45 upside down - "The powers delegated by the proposed Constitution to the federal government are few and defined." With 10,000 baby boomers retiring each day the string is about to break & California is just the starting point - here in NJ everything that Governor Christie tries to do to bring fiscal responsibility is met with resistance. Today our local library wanted Carol to sign a card saying that the governor should not cut library services - Christie can't win. Would the majority prefer Corzine's spending? I am afraid the answer may very well be "yes."
But ultimately, when life gets totally intolerable & even more of our money is confiscated, people will finally realize they have to take care of themselves. BO's plan is to orchestrate the taxing of us into the oblivion of government dependence which results in no one having money to create wealth & the corresponding private sector jobs & dignity that come with wealth creation. With getting a job the top priority of the millions of people who are unemployed or underemployed why does BO ignore this call for help & keep proposing raising taxes & concentrating on comprehensive immigration reform, Cap & Trade, & new Wall Street regulations if this was not his plan?
Speaking of Wall Street regulations - Goldman Sachs is on the hot seat of the hypocritically pious Senate's Permanent Subcommittee On Investigations for in essence shorting housing securities. Look @ the above graph - isn't shorting America's treasury securities even a more obvious bet now than shorting housing was a few years ago?
did not realize you were also interested in financial conditions of other countries including good ole USA. True in addition to Greece, other countries you listed, also in bad financial shape. It will take months for people to grasp the concepts of this - namely
ReplyDeleteinterest rates,now about zero, will zoom UP, as othercountries,including China,will want a better return on their money,when
they buy U S notes at treasury auctions, due to dollar not being strong. This will not happen next week,or next month, but can happen in several years.
I gather from several sources that I respect, above can happen.
Remember, when U S govt.needs money - they go to the printing press. When States and Cities need money, they cannot go to the printing press. They have to balance their books. They cannot print money out of thin air.
Unkind and cruel are excellent words to describe the entitlement benefit myth being continued by our govt...
ReplyDeleteNo, I am not thinking of shorting U.S. teasuries. I recently met a friend who said his son is making money buying Chinese stocks, of which I know nothing. I do know that Chinese stocks have been rising for past several years. Our market has also gone up the past year. But sometime in the future, due to U.S. govt. printing so much money, interest rates will rise.
ReplyDelete