Of course we will never pay it back. The risk of the US defaulting grows by the day.-Lou
We're Borrowing Like Mad. Can the U.S. Pay It Back?
In its battle against the financial crisis, the U.S. government has extended its full faith and credit to an ever-growing swath of the private sector: first homeowners, then banks, now car companies. Soon, President-elect Barack Obama will put the government credit card to work with a massive fiscal boost for the economy. Necessary as these steps are, they raise a worry of their own: Can the United States pay the money back?
The notion seems absurd: Banana republics default, not the world's biggest, richest economy, right? The United States has unparalleled wealth, a stable legal tradition, responsible macroeconomic policies and a top-notch, triple-A credit rating. U.S. Treasury bonds are routinely called "risk-free," and the United States has the unique privilege of borrowing in the currency that other countries like to hold as foreign-exchange reserves.
Read Article Here:
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/09/AR2009010902325_pf.html
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Lou,
ReplyDeleteAppreciate the article. It's probably the perspective that most of the mainstream in government is taking; that deficits don't matter right now. My take is that most of the mainstream isn't accounting for the obligations already on the books. At some point there has to be a logarithmic effect when we start talking numbers this big. My family of 5 has an obligation of $45,000+ for just the bailout and stimulus as a portion of the national debt. For us, the difference in $10K and 40K isn't just 30K. W/ each successive dollar the costs become exponentially heavier. Enjoy your blog, thanks!
vr,
fred h.