IMF Report. US Debt Will Be 100% of GDP by 2015

by: bruce nix | published: 05 18, 2010

Don't you just hate it when someone ends a discussion with the words; “I told you so!” Quite irritating isn't it? Well, here we go. $789 billion for stimulus I, $87 billion for bank bailouts, $80 billion for the automakers bailout, $1.2 trillion for health care, add a few other programs recently passed and we top about $3 trillion in spending in the first year of PBO's administration. That is conservatively speaking of course. These price tags are only preliminary. They are sure to escalate over time. In fact, they are guaranteed to escalate. In the entire history of federal government sponsored spending programs, I am not aware of a single one, that ever came out under the original estimate. Yet our leaders spend a great amount of time and effort, trying to convince the public that they are spending our money wisely and that they will bring all of their grandiose spending bills, in under budget.

If you believe all of that, I have some ocean front property in Nevada that I would like to sell you. Anyone with the least amount of sense can tell you that, it is not possible to spend yourself out of debt. If your debt exceeds your income, the logical step to take to reduce your debt, is to reduce your spending. That is economics 101. Even us dim-witted Joe Schmoes, know how to keep our checkbooks properly balanced to avoid an overdraft charge from the bank.

Our entire economic system is literally based on the belief, that the dollar is worth something. Years ago when we were on the gold standard, there was something tangible, backing up the value of the dollar. This Fiat currency that we have now, is a made-up work, of the likes of Alice In Wonderland. Our Congress buys into that notion, by spending as much as they like, without any fear of the economic collapse of our great nation. They seem to believe that we have an endless supply of money (they do, they just print more money) and that they are free to increase the size of government to any proportion, so they can regulate all of the idiotic entitlement programs that they can generate. Adding of course, more cost to their bill. How far can they go before they break the bank?

Apparently until the year 2015. At that point, according to the IMF, this nations debt will be at 100% of our GDP.  In other words; we will owe, as much as we produce. What happens then? One need look no further than Greece. The EU is now in the process of bailing out an entire country. Greece is facing riots in the streets by angry citizens, upset by their own governments attempt to decrease their debt, by cutting expenses. Kind of hard to trim the fat, after you are used to eating it that way for so long.

Europe is a prime example of how NOT to run your economy. With all of the entitlement programs that they have, their citizens wind up paying for it out the nose, from excessive taxation. It would make better sense from a sane persons point of view to not spend any more than you earn. We, however are not quite as smart as the ones in DC, are we? Tim Geitner, the head of the IRS, could not even figure out how to file his own income tax. Now the Europeans are warning us about our own spending! Folks, we are in deep sh _t and yet our trusted federal government wants to keep on spending, and at some point in time, they are going to have to ask the question that is on everybody's mind. “Where is all of this money going to come from?” What is their answer? Lets raise their taxes!

I have said it from the beginning, this health care scam (and that is exactly what it is, a scam) has only one intention and that is to tax us even more, under the guise of free health care for everyone, hence the urgency of its passage. Our government thinks of us as so stupid, that we will not figure this out and so arrogant as to believe that we will not do anything about it. What is so crazy about the entire deal is that the simplest thing to do to bring us out of these dire straits is to reduce federal spending. Period! Cut out the pork. Do away with the unnecessary entitlements. Welfare programs are draining this nation as more and more people jump on the gravy train. The government is spending more and more of our tax money actually paying people to NOT work. Thus, ensuring themselves a job forever and a large number of willing constituents, who do not want to lose their only source of income.

Last but not least, "I told you so!"

http://www.moneynews.com/StreetTalk/imf-us-debt-gdp/2010/05/17/id/359219

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