Nov 4, 2009 at 7:51 PM
DailyBail in Federal Bankruptcy, bailouts, bankruptcy, debt, default, deficit, federal debt, federal deficit, government, government, government bailout, government spending, government spending
Don't look for rose petals and purple unicorns in this piece from fund manager Eric Sprott. Rome is burning, officially, and it's just a matter of time until the United States defaults. The Peterson foundation keeps an unpleasant running count of our total national debt including unfunded obligations for social security and medicare. It's more than $55 trillion. That's a lot of promises made without a single dollar allocated. Remember that next time you hear Krugman or some other Keynesian tell you that deficits don't matter.
The projected US deficit from 2009 to 2019 is now slated to be almost $9 trillion dollars. How on earth does anyone expect them to raise this capital? As we stated in a previous article, in order to satisfy US capital requirements, all existing investors would have had to increase their US bond purchases by 200% in fiscal 2009. Foreigners, however, only increased their purchases by a mere 28% from September 2008 to July 2009 - far short of what the US government required.4 The US taxpayer can’t cover the difference either. According to recent estimates, tax revenue from all sources would have to increase by 61% in order to balance the 2010 fiscal budget. Given that State government income tax revenues were down 27.5% in the second quarter, the US government will be lucky just to maintain its currentlevel of tax revenue, let alone increase it.
The bottom line is that there is serious cause for concern here – and don’t be fooled into thinking this crisis will fix itself when (and if) the economy recovers. Just how bad is it? Below we outline the obligations of the US Federal Government from 2004 to 2009.
PLEASE email, Facebook, re-tweet, share and take our stories with you when you leave. Our only weapon against the madness is GREATER AWARENESS. Thank you.
Article originally appeared on The Daily Bail (http://dailybail.com/).
See website for complete article licensing information.