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Obama Admits We're Bankrupt! |
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Thursday, 17 March 2011 20:02 |
This is from President Obama's proposed budget:
While unfortunately President Obama never bothered to scribble these calculations in the margin himself, it was nonetheless admitted to by the President himself in his own budget document that in fiscal year 2011, the deficit exceeds by $229 billion all so-called "discretionary spending", which includes the Departments of Defense, Homeland Security, Health and Human Services, Education, Housing and Urban Development, Justice, Labor, Veterans Affairs, Energy, Interior, Environmental Protection, State, and Agriculture!
In other words, everything that the Congress and the President fight about and everything that we all generally think of as "the government" is entirely in the "red" part of the ledger. If we were to balance the budget tomorrow, unless we were to address so-called "mandatory spending", i.e. entitlements, then all discretionary spending would go to zero, including the entire military. And we would still have to finance $20 billion of the entitlements, the $207 billion of interest on the national debt, and $2 billion of disaster costs.
Let me repeat that in case you ignored it out of shock -- even if we closed down every department and every military base and fired every employee of the federal government and every soldier, we would still have to borrow money in order to pay Social Security, Medicare, Medicaid, etc., and the interest on the national debt!
I don't think there's any other way to put it but that we're bankrupt!
But it gets worse! The average interest rate on the national debt is currently only 2.992%, which is abnormally and irrationally low. The last time we had significant inflation, 5-year bonds went to 14.25%. Even if we incurred no more debt, which as we've seen is not possible, then the interest payment could go to over $2 trillion! That alone accounts for our entire federal income, without even paying a cent of entitlements yet, let alone discretionary spending!
So we already can't pay for the primary functions of our government or our debt service and we're a stone's throw from being unable to pay for entitlements as well. Meanwhile, China has stopped buying our debt, and given present circumstances, Japan probably will as well. That's our two largest lenders, other than the Federal Reserve. If it falls to the Fed alone to cover our exponentially growing borrowing needs, it can only do so by printing money out of thin air and devaluing the currency.
Despite this absolutely dire predicament, in a fit of cognitive dissonance, President Obama and the Democrats are trying to fund and build the massive new entitlement of Obamacare. Oh yeah, and the Baby Boomers are starting to retire, which will decrease federal income and explode entitlement spending! But the politicians still fight over a billion here and a billion there... barely even a rounding error. It is clear now more than ever that no solution will be advanced before hyperinflation sets in.
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Last Updated ( Friday, 18 March 2011 14:11 )
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