Going broke
News
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Posted 26/08/2014
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3858
The US’s own Congressional Budget Office (CBO) last month issued a report bringing forward their forecast on when the US will go broke. They now project this will happen in just 15 years’ time, 2030, rather than their previous estimate of 2050. How can this happen? It is a combination of the obvious actions of the past and present, and less talked about future obligations. Simply, the US Government has not run a real surplus budget since the 60’s. So to be clear, they have spent more than they have received (through taxes etc) for 40 years. In the throes of desperation trying to stimulate the post GFC economy they have increased it no less than 400% over 6 years funded largely by just printing the world’s reserve currency. Their debt now stands at around $17.7 trillion. But that is just the beginning. They have future unfunded obligations that are committed, like social welfare and medicare that they don’t even put on their balance sheet. The Government’s own CBO say they are $15 trillion short of what is need to meet these needs over the next 75 years, but independent analysts have this number much much higher (go to the excellent http://www.usdebtclock.org/ for an eye opening experience).
Why are we raising this? Because it highlights our continual message that we are living in a world reliant on ever increasing debt and that is simply unsustainable. It highlights the tenuous nature of the whole system and that when it goes pop, which it will, you’d like to have some of your wealth in real money that can’t be written off or inflated away. Gold and silver bullion. (It also highlights what our Government is trying to avoid through passing this budget).