finbully
Well-known member
A projection for a $9 trillion federal deficit over 10 years is difficult to understand. $9 trillion is $9,000,000,000,000. Assuming Obamanomics is passed and followed through; our national debt will rise from 41% of the gross domestic product (GDP) in 2008 to 82% GDP in 2019. For those naysayers, this information comes from the White House Budget Office and the Congressional Budget Office.
The U.S. government has been spending a great deal more than it has been taking in, and it is doing this by borrowing money. How has this borrowed money being paid back you ask? By borrowing more. It is as if you or me get another credit card and use its line of credit to pay the first one back, and so-on and so-on. Talk about a Ponzi sceme. What happens when we increase personal debt to pay off existing debt? Eventually we are charged higher rates of interest as our credit worthiness becomes credit worthlessness. How do we get out of this self imposed mess? Remember I’m still talking about personal debt. Well we have some options:
1. We can buckle down, own up to our misdeeds and not be a burden on society by taking ownership and paying off our debt by cutting spending and using the “savings’ to pay the debt. This can be accomplished by even getting a second job. I took this route back when I spent beyond my means.
2. We can skip out on our debt and let all consumers pay it off in higher prices for goods, services. By the way, this raises interest rates as credit availability tightens. You don’t need to be Einstein to know this route ruins one’s own credit leading to higher personal interest rates in the future.
Now what does a government do? Well, governments generate very little income so they raise money through taxation and fees. At some point if our government spending keeps going up and up, taxes and fees would need to be raised to a level that will make the best of us revolt. Our country would no longer be a great power, and may not even be able to provide the most basic services.
Hard choices will need to be made for the path we take. We will move out of this current recession and if we have learned anything from it, it is that we can live and enjoy life with a little bit less. I’m not minimizing the fact that some of us have experienced very hard times.
As our economy recovers, hard choices must be made. Do we what to leave this fiscal mess to our children? Or do we act as the economy recovers? I have always lived by the creed that the best time to begin tackling a problem is right after the problem is identified. Our government can sit and discuss, plan, debate but what needs to be accomplished is decide and act.
My $0.02 on the fiscal train wreck we may face.
The U.S. government has been spending a great deal more than it has been taking in, and it is doing this by borrowing money. How has this borrowed money being paid back you ask? By borrowing more. It is as if you or me get another credit card and use its line of credit to pay the first one back, and so-on and so-on. Talk about a Ponzi sceme. What happens when we increase personal debt to pay off existing debt? Eventually we are charged higher rates of interest as our credit worthiness becomes credit worthlessness. How do we get out of this self imposed mess? Remember I’m still talking about personal debt. Well we have some options:
1. We can buckle down, own up to our misdeeds and not be a burden on society by taking ownership and paying off our debt by cutting spending and using the “savings’ to pay the debt. This can be accomplished by even getting a second job. I took this route back when I spent beyond my means.
2. We can skip out on our debt and let all consumers pay it off in higher prices for goods, services. By the way, this raises interest rates as credit availability tightens. You don’t need to be Einstein to know this route ruins one’s own credit leading to higher personal interest rates in the future.
Now what does a government do? Well, governments generate very little income so they raise money through taxation and fees. At some point if our government spending keeps going up and up, taxes and fees would need to be raised to a level that will make the best of us revolt. Our country would no longer be a great power, and may not even be able to provide the most basic services.
Hard choices will need to be made for the path we take. We will move out of this current recession and if we have learned anything from it, it is that we can live and enjoy life with a little bit less. I’m not minimizing the fact that some of us have experienced very hard times.
As our economy recovers, hard choices must be made. Do we what to leave this fiscal mess to our children? Or do we act as the economy recovers? I have always lived by the creed that the best time to begin tackling a problem is right after the problem is identified. Our government can sit and discuss, plan, debate but what needs to be accomplished is decide and act.
My $0.02 on the fiscal train wreck we may face.
