Meltdown In Greece Is Just A Warm-Up For Eventual U.S. Default (Op-Ed From Niall Ferguson)
The long-run projections of the Congressional Budget Office suggest that the US will never again run a balanced budget. That’s right, never.
It began in Athens. It is spreading to Lisbon and Madrid. But it would be a grave mistake to assume that the sovereign debt crisis that is unfolding will remain confined to the weaker eurozone economies. For this is more than just a Mediterranean problem with a farmyard acronym. It is a fiscal crisis of the western world. Its ramifications are far more profound than most investors currently appreciate.
Yet the idiosyncrasies of the eurozone should not distract us from the general nature of the fiscal crisis that is now afflicting most western economies. Call it the fractal geometry of debt: the problem is essentially the same from Iceland to Ireland to Britain to the US. It just comes in widely differing sizes.
What we in the western world are about to learn is that there is no such thing as a Keynesian free lunch. Deficits did not “save” us half so much as monetary policy – zero interest rates plus quantitative easing – did. First, the impact of government spending (the hallowed “multiplier”) has been much less than the proponents of stimulus hoped. Second, there is a good deal of “leakage” from open economies in a globalised world. Last, crucially, explosions of public debt incur bills that fall due much sooner than we expect.
Yet even a casual look at the fiscal position of the federal government (not to mention the states) makes a nonsense of the phrase “safe haven”. US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941.
Even according to the White House’s new budget projections, the gross federal debt in public hands will exceed 100 per cent of GDP in just two years’ time. This year, like last year, the federal deficit will be around 10 per cent of GDP. The long-run projections of the Congressional Budget Office suggest that the US will never again run a balanced budget. That’s right, never.
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We'll print the Dollar into oblivion before default, but the end result is the same.
Feb 11, 2010 at 11:30 AM
Reader Comments (7)
http://letthemfail.us/archives/3545
Just interesting for us in USA suffering from thE wrath of CRIMINAL BANKER TERRORISTS
As the U.S. sinks into bankruptcy, we are ridiculed abroad for failing to acknowledge the obvious: Americans have long been the target of a fraud operated by Israelis, pro-Israelis and those supportive of their goals for the region.
What better way to wage war on the U.S. than from within? How else can Israel expand except by duping its super power ally to wage wars for Greater Israel? Never mind the cost in blood and treasure. As an ally, the U.S. is easily portrayed as guilty by association.
Those promoting the Crotch Bomber scare are part of the problem. In the Information Age, this latest false flag operation is typical of how treason proceeds in plain sight yet, to date, with impunity. Those media outlets marketing this latest lie are an enemy within.
-- Jeff Gates is author of Guilt By Association, Democracy at Risk and The Ownership Solution. See www.criminalstate.com. He was counsel to the US Senate Committee on Finance (1980-87).
http://www.aljazeera.com/news/articles/39/Christmas-day-crotch-bomber-tied-to-Israel-FBI.html
Germany and France will on Thursday promise their support for debt-laden Greece in a vow of eurozone solidarity but they are unlikely to come up with a detailed rescue plan.
Goldman crooks are at it again! Im very convinced that the golman crooks are manipulating the greece bailout for their own gains...
more later...
http://www.businessinsider.com/fannie-and-freddie-are-the-real-budget-busters-and-theyre-spending-money-to-preserve-an-accounting-fiction-2010-2?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%29
http://www.pushhamburger.com
OTHERWISE I'd say the current economic situation would be RIPE for any political leader who was warlike, preferred to lay blame on Jewish financiers and exhibited a superiority complex over RETARDS & black people.
http://foxandhoundsdaily.com/blog/joel-fox/6432-what-if-los-angeles-goes-bankrupt