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Ok, the debt is bad. Most of the debt is non discretionary. Social Security, Medicare, Welfare for babies, Defense, Interest on Bonds to the Chinese. So what are you going to cut? Cut anyone of those things you will be voted out of office, the third rail is alive and strong in the US. What I would like to hear is what happens when the debt is so big that there is no way to pay it back, what happens?
Ok, the debt is bad. Most of the debt is non discretionary. Social Security, Medicare, Welfare for babies, Defense, Interest on Bonds to the Chinese. So what are you going to cut? Cut anyone of those things you will be voted out of office, the third rail is alive and strong in the US. What I would like to hear is what happens when the debt is so big that there is no way to pay it back, what happens?
Cut all that stuff 20% each, and military/defense 60%
Debt is the other side of the credit coin, growing a national economy on credit simply renders said economy to the consequences of an inevitable unsustainable debt. This debt burden has become the normal state of economic affairs throughout the worlds most economically advanced nations, it was accepted that each nation's national debt would be wiped out by investing the borrowed money into a growth of manufacturing and exporting scenarios. Throw in the notion that the maximization of profits naturally leads to a greater prosperity thereby cutting workers salaries, employing more machine technology, and making things at the worlds lowest labor cost and you have the recipe for the perfect economic storm. Too much borrowed money chasing too much needless stuff, too many people leveraging their credit to mitigate the reality of lower wages, and the idea that those low wage workers in the third world would somehow make up the new consumer class were all poor economic practices, and it was bound to fail. We'll all be looking for individual salvation eventually, forget the government or wall street helping us, they've got theirs and they have no plans for sharing.
To think that we can simply cut the government cost factors and have a miraculous recovery is to ignore the reason for our predicament, the oversimplification of the problem is becoming just one more problem, the solution isn't covered in some economic operators manual, nor is it readily apparent to most that we have passed the point of being able to apply the bandages that will assure the patients survival, the US economy is on life support and barely breathing on it's own, but we can always deny that reality and continue the charade of government created dollars acting as our collective morphine dulling the pain.
That we now are in full swing in our attempts to navigate the raging waters of our own economic storm shouldn't be a surprise to any of us, there is no certainty of our individual boats being capable of lasting through the storm and worst of all, the collective ship of state is listing badly and taking on more water (debt) than it can handle. All of this could have been averted, and that's the lesson to be taken from our foolish decision to go along with the idea that money can be conjured up, taken from thin air and spent as though it had real value, spend and pretend, I think that's the accepted term now to describe our governments plan to right the wrongs of the past fifty years of insane credit/monetary policies.
As for predicting the future of America I'm looking at the writings of Dimitri Orlov the Russian author who went through the Russian economic contraction that was terribly painful, they have never recovered from the effects of their collapse. I'm old so it hasn't been as punishing for me, but my grandchildren will surely experience the worst of the fallout of all the poor decisions made by those who will probably be sipping their favorite wine as the rest face the music full on. We will need to figure out how each of us will endure the worst aspects of this reality on our own, with family and friends we'll probably get through it all with a lot of learning in the process.
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