Is the US bankrupt?
Posted: April 10th, 2011, 9:01 pm
As a finance man I would say most of the real heads know this is already past the point of no return. Eventually you can't refinance the debt and you either default or print money. Either way has consequences equal to default, you get cut off and that's the end.
Old paper below, it is even worse now. The author isn't some chump. With a present value of future obligations of $70B you just can't dig your way out with increased GDP (and the USA days of big GDP growth are over anyhow). You have to shut down the govt or double all personal/corporate taxes, or strategically default on someone big (like China or all oldies).
The avg Joe doesn't get this, they think the market is coming back. I think the market may have one more bounce in it, say a bubble from '13-16 or something and people get all excited that "it's over phew" before the final spiral down. Absolutely another scam like subprime would end things, the last scam drained all the money, all you need now is one more and it's over. Or if the Chinese or Japanese sell bonds, then it's over too. Or it could stragle on for 20yrs and then collapse. But i can't see a way it doesn't end in our lives. The decline is happening so fast you can see it year to year.
As a market guy I don't get personal about it, I just see that as being what exists. Thus best to have an exit plan and run for the door before everyone else.
Thoughts about this predicament?
http://research.stlouisfed.org/publicat ... likoff.pdf
Old paper below, it is even worse now. The author isn't some chump. With a present value of future obligations of $70B you just can't dig your way out with increased GDP (and the USA days of big GDP growth are over anyhow). You have to shut down the govt or double all personal/corporate taxes, or strategically default on someone big (like China or all oldies).
The avg Joe doesn't get this, they think the market is coming back. I think the market may have one more bounce in it, say a bubble from '13-16 or something and people get all excited that "it's over phew" before the final spiral down. Absolutely another scam like subprime would end things, the last scam drained all the money, all you need now is one more and it's over. Or if the Chinese or Japanese sell bonds, then it's over too. Or it could stragle on for 20yrs and then collapse. But i can't see a way it doesn't end in our lives. The decline is happening so fast you can see it year to year.
As a market guy I don't get personal about it, I just see that as being what exists. Thus best to have an exit plan and run for the door before everyone else.
Thoughts about this predicament?
http://research.stlouisfed.org/publicat ... likoff.pdf