I was watching Joe Scarborough the other night, and he focused on a major problem we have been facing for some time, the national debt level and its inevitable collapsing of our economy.
A few major features of our situation seem apparent to me. First, the reason for the national debt is the huge amount of spending. Tax cuts can actually lead to increased tax revenues. The idea is to find out what the optimal tax rate is and utilize that rate.
Second, politicians can't get elected by running on a platform of spending cuts. Those who get elected are the ones promising the most handouts, which are increasingly expensive, and ONGOING (ie. not one time expenses). Therefore, the problem will not go away until the economy is hit hard with a depression.
Third, the baby boomers will begin to retire within a few years, putting an increasing strain on medicare and social security to and extent that will bankrupt them. Coupled with an increasing national debt level, this will lead to foreign investors finally taking their money out of treasuries before the fed defaults on its obligations, or prints more money, either of which will drive up interest rates, stifle growth and perpetuate the depression.
When will all this occur? I have studied this topic a bit and note that those in the know all agree this WILL happen because we won't elect someone to fix it, as I mentioned above.
Doom and gloom forecasters have been calling for a MAJOR bust/depression for thge last thirty years or so. Anyone remember Howard Ruff? It will happen when it happens...or won't.
The support base for helping to pay the finance charges on our debt via borrowing their Social Security is going to retire soon. No longer will we have the cash inflows to support frivolous spending, because they will be a net draw on resources. That, coupled with increasing debts to the tune of $7.x trillion is leading us to a depression quickly!
How long before the inevitable DEPRESSION
