Fwd: FWC: U.S. Government Debt Remains the Main Event

Government Debt as a Percentage of GDP by Country

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Subject:	FWC: U.S. Government Debt Remains the Main Event
Date:	Mon, 12 Dec 2011 04:51:37 -0800
From:	Jas Jain

FWC: U.S. Government Debt Remains the Main Event

I agree with the message of the title. However, the matter would be resolved by forcing austerity on Americans as it is being forced on Greeks, Irish and Italians. I know, economic parasites like Krugman think that austerity is a bad idea, at least for now and in the near future. Well, debtors can't be choosers, Professor Krugman. Your mentor Bernanke and you would not be allowed to choose the timing of austerity, or the next recession, or the next deflationary depression, or the collapse of the current system over which parasites like you still exercise lot of influence. The appointment of Bernanke by GW Bush, and of Greenspan earlier by Reagan, was the last ditch effort to save the System of the Crooks by kicking the can down the road via pushing debt. Now the can, containing toxic financial material, or FWMDs, as Buffett described them before the crisis, is too heavy and might explode.

According to Bloomberg, the five most leveraged countries are: Greece, Ireland, Portugal, the UK and the US. The first three are small and wouldn't take the global economy down but the last two, especially the last one, would bring the global economy to its knees, China or no China. Economies of countries like India would be flattened to the ground in the global depression, Made In USA and nnot in Euro zone. The creditor countries of East Asia, China, Japan and South Korea, in the process to forming a free trade zone, would fair the best.

It is the debt, stupid!

Jas

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Government Debt as a Percentage of GDP by Country

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http://www.prudentbear.com/index.php/featuredcommentaryview?art_id=10604

 

U.S. Government Debt Remains the Main Event

• by Satyajit Das
• December 05, 2011

Greece and the other debt burdened European countries are merely the first carriages in the derailment of the "Sovereign Debt Express" train service.

The failure of the congressional super-committee to reach agreement on $1.2 trillion in budget cuts means that addressing the problem of U.S. public finances is unlikely in the near term. The failure also casts doubts on the ability of U.S. policy makers to overcome political differences to take actions to stabilize U.S. government debt with potential consequences for the U.S. and global economy

At Debt's Door…

Ralph Waldo Emerson wrote: "The world owes the world more than the world can pay." The U.S. certainly owes more than it can repay. U.S. government debt currently totals over $14 trillion.

The U.S. Treasury estimates that this debt will rise to around $20 trillion by 2015, over 100% of America's Gross Domestic Product ("GDP"). Even these dire forecasts rely on extremely robust assumption about U.S. growth around 5-5.5% per annum. Lower growth will translate into higher debt levels.

There are other current and contingent commitments not explicitly included in the debt figures reported by the government. Since July 2008, the U.S. government has supported Freddie Mac and Fannie Mae (known as government sponsored enterprises (GSEs)). This totals over $5 trillion in additional on or off-balance sheet obligations.

The debt statistics do not include a number of unfunded obligations - the current value of mandatory payments for programs such as Medicare ($23 trillion), Medicaid ($35 trillion) and Social Security ($8 trillion). Projections show that payouts for these programs will significantly exceed tax revenues over the next 75 years and require funding from other tax sources or borrowing.

In addition to Federal debt, U.S. State governments and municipalities have debt of around $3 trillion.