Is the U.S. Government Insolvent?

Given the economic situation at hand, the word "insolvent" might be nominated as Word of the Year (2008, 2007). However, given all the attention to that word -- which basically means one is unable to cover financial obligations -- I'm not sure why more people aren't a little more concerned about the idea that our government itself may be, in effect, insolvent, and becoming more so every day.

Consider the trillions committed for economic stimulus and bailout purposes. We already owe trillions (including $1 trillion to China). Recall that private enterprise, real estate, and consumer spending all bring in the tax revenues that the government requires to fund its initiatives if it had a balanced budget. Needless to say, tax income is dwindling as the economy stumbles and teeters on the brink of even more serious damage.

And yet the government is committed to spending even more, which means borrowing more and/or firing up the printing presses, making some decisions that could cripple many businesses and drive some overseas -- not to mention hurt already beleaguered consumers. Anybody who realizes money doesn't grow on trees or get delivered by storks (in the case of trillions, flocks of storks I guess, or maybe Monsanto's (NYSE: MON  ) working on genetically modified super storks) should be very concerned.

Same economic story, different administration
I took a lot of heat for a recent article expressing concerns about President Barack Obama's economic policies, although I tried to make it clear that I had been none too pleased with policies under former President George "This Sucker Could Go Down" Bush's administration either, which I referred to as a massive mugging. I was simply pointing out a continuation of terrible economic blunders that we can ill afford in the face of an admittedly scary economy, an economy that desperately needs to correct itself from the artificiality of several back-to-back asset bubbles.

For what it's worth, in my book, expanding government, spending taxpayer money, and digging us into a huge debt hole for defense spending is most certainly not "better" than expanding government, spending taxpayer money, and digging us into a huge debt hole for social programs that likely won't result in real, long-term economic growth. I find war spending far more odious, but neither should come to pass, especially with the kind of fiscal black hole our government has been digging with a Keynesian shovel -- although admittedly, even John Maynard Keynes didn't condone governments indulging in deficit spending in supposedly good times like the Bush administration did.

Last year's documentary I.O.U.S.A., which featured well-known people in government and business like Alan Greenspan, Paul Volcker, Ron Paul, and Berkshire Hathaway's (NYSE: BRK-A  ) (NYSE: BRK-B  ) Warren Buffett, pointed to an overburdened and unsustainable situation even before all the bailout madness really picked up steam. The National Debt Clock ran out of numbers, folks. That was meant to be a wakeup call: We were already over our heads!

Of course, people can argue all they want about "this guy versus that guy," and why "we shouldn't question this new guy's economic policies because he's so much better than the last guy," or "this political party's my political party so they're OK no matter what," and "gee, do we ever hate those other guys!" Maybe some people find all that team mentality as comforting as six-packs and Monday Night Football, but I think it's all a silly distraction that distracts people from thinking about the real issues. And as far as I can tell, what the real issue is: Where's the money, and where's more of it going to come from?

Beyond the banks
Many people are already well aware of the fears that huge banks like Citigroup (NYSE: C  ) , Bank of America (NYSE: BAC  ) , and Wells Fargo (NYSE: WFC  ) up to their eyeballs in risky loans that are rapidly defaulting are basically insolvent. Meanwhile, the consumer climate makes dying dinosaurs like General Motors (NYSE: GM  ) even sicker, and of course its own debt load's nothing to sneeze at.

But all that's child's play when you ponder our government's cash burn and burgeoning obligations.

The $3.6 trillion budget President Obama recently spearheaded includes a near-term deficit of a mind-blowing $1.75 trillion. While he vows that the deficit will be halved later, that seems built upon some rather rosy economic recovery projections coming to pass, and if industries become increasingly beleaguered (and businesses provide jobs and tax revenues, folks), then I think you can see why this might present a problem down the road.

Meanwhile, the National Debt is currently just under $11 trillion and growing. You can't just keep adding debt while GDP declines, and raising taxes will strangle already beleaguered businesses and citizens. The Federal Reserve is firing up the printing presses, but that brings to mind the very real risk of hyperinflation.

Last but not least, I hope nobody missed the fact that last week China expressed concerns about the U.S. being good for its debt to that country. If that doesn't scare you -- and support the thesis that there is major reason for concern -- I don't know what will. Meanwhile, France and Germany balked at spending for their own stimulus plans. Um, hello?

Fasten your seatbelts
Unfortunately, the government's overheated spending, relying on future revenues and of course, that of future generations, reminds me a little too much of the Ponzi scheme mentality. And if entrepreneurship and business suffers, then our economy will be awfully close to a Ponzi scheme, where money is simply handed around without any real productive enterprise going on. Only this time it's going to include ugly side effects like worthless greenbacks resulting from out-of-control inflation. (And the Fed's $1 trillion move yesterday certainly stirs up still more concerns about runaway inflation even if the stock market did rise on the news.)

And of course, things could most certainly get far worse from there.

I know this sounds harsh, but I'm a proponent of trying to recognize the truth instead of fighting to stay in a state of overly optimistic delusion. I'm not stuffing cash in my mattress or giving up on the idea of investing; I try to remind myself that panic is destructive, not constructive, and won't help our current situation.

Yet I do believe there are grave issues at hand that we should contemplate, which could most certainly change the way we invest, not to mention the way we live.

And one of them is, is the U.S. Government insolvent? Feel free to comment in the comment boxes below, but I fear the road to real economic recovery is looking awfully rocky -- fasten your seatbelts, it's going to be a bumpy ride.

Berkshire Hathaway has been recommended by Motley Fool Inside Value and Motley Fool Stock Advisor. The Fool also owns shares of Berkshire Hathaway. Try any of our Foolish newsletters today, free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.


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  • Report this Comment On March 19, 2009, at 4:32 PM, TURI57 wrote:

    The push for the last 30 years has been to lower wages and benefits for the American workers, to bust unions, to compete with slave wage countries... self distraction is what we're good at!

    WITHOUT GOOD PAYING JOBS WE HAVE NO TAX BASE!

    IS THE US GOVERNMENT INSOLVENT? DO WE HAVE A TAX BASE?

  • Report this Comment On March 19, 2009, at 4:47 PM, sett0047 wrote:

    And with out employers, who pays the wages?

  • Report this Comment On March 19, 2009, at 4:47 PM, crycryagain wrote:

    The sales pitch for SA at the end of the article seems kind of odd--why bother?

  • Report this Comment On March 19, 2009, at 4:55 PM, nosunday wrote:

    It is unfortunate that any uninformed person, can write a diatribe on the internet, unchallenged. One of the first premises of Public Finance courses in Economics is that states unlike individuals are "permanent," that is they are long lasting compared to human lives which are finite. True, the above assertion is not entirely factual, but, it conveys the sense. Most advanced nations run deficits, during bad times or to make long lasting investments. Even individual like you and I, purchase houses, cars, college education, etc. as an investment in our future. These are deficits, because the current income/cash flow can't meet the outflow required by the investment. So, if the deficits are reasonably incurred then there is no reason to object or to become hysterical like the above writer.

    The monthly/quarterly payment or mortgage payment to pay off these investments is to put in other terms a tax. Most advanced nations including European and Japanese governments run both short term and long-term deficits. I don't need a lecture on rates of growth of these economies, that is, the U.S. growth rate (ostensibly higher) vs. the growth rates of other advanced countries. That is the Republican mantra. That is precisely why we have so many un/undereducated, superstitious, people in this country, why infant mortality rates are so high and life expectancies are among the lowest in the world, the health care in this country barely covers 50% of the population, roads and streets are busted up, etc. Most graduate students (>50%)in engineering and sciences are immigrants as are researchers in industrial and government labs. Go to any European country, especially to Denmark, Norway, Sweden, France and look at their investment in infrastructure and quality of life. Denmark, a very small country has the largest wind-power production per capita in the world!

    The Republican mantra is "starve the beast" by lowering taxes, which in effect lowers the taxes on the rich, who benefit the most from these policies. A class system is hence created and perpetuated. & then they turn around and play politics with "deficits" and all the emotional hysteria that surrounds these deficits.

    I have to close this dissertation, & so.

  • Report this Comment On March 19, 2009, at 4:59 PM, MarcelNYC wrote:

    The U.S. government by definition can never become insolvent. It can always print as much money as it needs to pay off debt (including the $1 trillion to China). The reason it won't do this is because it will devalue the dollar.

    This situation isn't the same as when you go borrow money from a bank to buy a car, so you can't apply that same logic because the reality of how it works doesn't make sense the first time you hear it. China and other bondholders are actually much happier if the debt never gets repaid than if the government is forced to artificially deflate the value of the dollar by printing more greenbacks. It's macro-economic vs. micro-economic thinking.

  • Report this Comment On March 19, 2009, at 5:05 PM, mlaursen wrote:

    The Fed is already "firing up the printing presses"; The Open Market Committee just announced that they plan to buy up several hundred billion dollars of Treasury securities and mortgage bonds.

  • Report this Comment On March 19, 2009, at 5:23 PM, Corporality wrote:

    Another great hip shooting article. I love the way you call it the way you see it, completely ignoring what people want to hear. The Communists Ministry of Anti-Union Defamation unleashed their little red book spouting machine on you, with your article on the UAW and you kept rocking.

    Obama disciples who when asked, Can we throw money away wily nilly and solve our economic downturn?", chanted "YES WE CAN!", and attacked your thoughtful article on economic policy with a UAW vehemence. I voted for Obama in both the primary and the general but am shorting the market, since the economic solutions put forth so far, largely look like more of the same Oligarchy serving "solutions" of the Bush past, and less the future health of our Nation solutions that we need.

    Thank you for your bravery in taking all the heat you have while still leaping out of the trenches to lead another charge. I love to read your stuff because I know it's what's so rare to find in print or anywhere else, authentic views that cater to no one, including me, ha.

  • Report this Comment On March 19, 2009, at 5:23 PM, StockLeader wrote:

    I love some peoples thinking. Sure we borrow money to buy cars and houses, but the payments have to meet the monthly budget. You don't buy a house planning on borrowing your monthly payment each month. Wake up buddy, 11 trillion is around $180K for every household in the Country. None of my friends plan on paying the Government, so how will they come up with money? Maybe I can get a loan from China to pay my share of the deficit? Better yet the FED can buy treasury notes and then we notice they are just printing money. You see if Obama said, he was going to finance all the spending by just printing the money it would not be good. So now he can say, the money is financed by the sale of treasury notes. Make me think of the bank term kiting, you know when you write a check to pay a bill and then write another check to deposit in the banks to cover the first check. No money just float. Final question to ask, who going to pay that $180,000.00 per household?

  • Report this Comment On March 19, 2009, at 5:33 PM, knighttof3 wrote:

    Yes. The US government is insolvent. So is every other government in the developed countries. Those that aren't, have invested in the insolvent governments. So, everything will work itself out :-)

    One good thing out of this catastrophe is bankers getting laid off. It was ridiculous to have financials 20% of S&P. These folks move money from one place to another. The less of them the better. Yes they are needed to efficiently reallocate capital (and what a superb job they do) but do we need so many of them? Same with lawyers, politicians and accountants. We need to find a way to cull their herds so only the best remain.

  • Report this Comment On March 19, 2009, at 5:48 PM, mjpriz wrote:

    What TUR157 and others do not understand is the first rule of economics. The wealth of a country is equal to precisely the amount of goods and services produced by the country. If a union goes on strike and demands twice the wages, but produces the same amount of goods or services, wages increase. BUT WEALTH DOES NOT!

    If the government raised the minimum wage to $100/hour, wages increase. BUT THE WEALTH OF THE COUNTRY DOES NOT.

    If the government transfers money from the wealthy and from the the productive and give it to the lazy, the uneducated, and the octa-mom, no wealth is created.

    This brings us to the second rule of economics. You cannot legislate wealth.

    As for "nosunday," you are correct in that the state is permanent and people are finite. But when the state permanently keeps screwing up things, the finite people revolt.

    I know the common thought lately has been how good Obama is and how bad Bush was. You have all been bamboozled! WE DO NOT HAVE A KING! The president is just a cheerleader. All spending bills come from Congress. If you do not like the economic policies of the last eight years, blame Congress! If you do not like how much money was spent on the war, blame congress. Congress funded the war.

    It was congress (at the cheerleader's urging) that gave 160 billion to AIG. Evidently, they did this without checking AIG's balance sheet. Anyone who wanted to look a AIG's liabilities would have seen that they would have to pay out 160 million in bonuses. How can you tell if a company is worth saving if you do not check its balance sheets?

    Alyce Lomax is correct in his article. We are in for a bumpy ride. Congress is out of control. The government is printing money like there is no tomorrow. PRINTING MONEY DOES NOT CREATE WEALTH! It just devalues the money that we have in our wallets.

  • Report this Comment On March 19, 2009, at 5:51 PM, mjpriz wrote:

    What TUR157 and others do not understand is the first rule of economics. The wealth of a country is equal to precisely the amount of goods and services produced by the country. If a union goes on strike and demands twice the wages, but produces the same amount of goods or services, wages increase. BUT WEALTH DOES NOT!

    If the government raised the minimum wage to $100/hour, wages increase. BUT THE WEALTH OF THE COUNTRY DOES NOT.

    If the government transfers money from the wealthy and from the the productive and give it to the lazy, the uneducated, and the octa-mom, no wealth is created.

    This brings us to the second rule of economics. You cannot legislate wealth.

    As for "nosunday," you are correct in that the state is permanent and people are finite. But when the state permanently keeps screwing up things, the finite people revolt.

    I know the common thought lately has been how good Obama is and how bad Bush was. You have all been bamboozled! WE DO NOT HAVE A KING! The president is just a cheerleader. All spending bills come from Congress. If you do not like the economic policies of the last eight years, blame Congress! If you do not like how much money was spent on the war, blame congress. Congress funded the war.

    It was congress (at the cheerleader's urging) that gave 160 billion to AIG. Evidently, they did this without checking AIG's balance sheet. Anyone who wanted to look a AIG's liabilities would have seen that they would have to pay out 160 million in bonuses. How can you tell if a company is worth saving if you do not check its balance sheets?

    Alyce Lomax is correct in his article. We are in for a bumpy ride. Congress is out of control. The government is printing money like there is no tomorrow. PRINTING MONEY DOES NOT CREATE WEALTH! It just devalues the money that we have in our wallets.

  • Report this Comment On March 19, 2009, at 5:57 PM, Savannahboy wrote:

    Marcel,

    You must pick up a history book if you think the US couldn't become insolvent. In fact, you can even pick up a recent newspaper and check out what happened to Iceland. Just because you control a printing press doesn't mean you can't become insolvent. If the dollars rolling off the printing press are worth less than the paper that is going into the printing press that is a pretty good indication you are insolvent.

    It is true that businesses and people borrow money to finance many different purchases or to fund continuing operations and the government would be crazy not to have any debt. I think it would be a poor capital structure for the government or any business not to have some debt. Unfortunately, the government doesn't have operating cash flow to service the debt. It is running a deficit and borrowing more to service the debt and hence increasing the debt service for the future. The problem with this is that there is a breaking point to the national debt where we won't be able to take in enough in revenue (taxes) to service the debt even with only paying interest. Interest rates are sure to rise should the Chinese stop buying treasuries, so I figure that number is somewhere around $30 trillion. At that point, Alyce, I would concur. The US will probably be insolvent. Let's hope it doesn't get there.

  • Report this Comment On March 19, 2009, at 6:08 PM, wuff3t wrote:

    "Ask not what your country can do for you, but what you can do for your country..."

    Well, here's the answer to that question: You can bail it out - ie work for nothing until the $180,000 per household is paid off.

  • Report this Comment On March 19, 2009, at 6:20 PM, ctangus wrote:

    "What TUR157 and others do not understand is the first rule of economics. The wealth of a country is equal to precisely the amount of goods and services produced by the country. If a union goes on strike and demands twice the wages, but produces the same amount of goods or services, wages increase. BUT WEALTH DOES NOT!"

    Well said. If there's one economic fact that should be taught from kindergarten, that's it.

  • Report this Comment On March 19, 2009, at 6:34 PM, Varchild2008 wrote:

    Our insolvent Federal Government is going to need an Uptick Rule for the FOREX to save the Dollar soon.

  • Report this Comment On March 19, 2009, at 7:57 PM, ResponsibleMoney wrote:

    China is worried about inflation and possible devaluation of the dollar. That's why it said what it did a few days ago. If it were truly worried about insolvency, it wouldn't have been continuously buying Treasuries during this crisis. It is thinking like a creditor now, instead of an exporter. I'm sure it wasn't very happy about the Treasury buying back long bonds, but the Fed is trying to fight deflation. It doesn't have much left in its arsenal since the fed funds rate has been brought down to basically zero. I don't think many people really appreciate how insidious a deflationary spiral is and the type of horrible incentives it creates in an economy. Our debt to GDP is not close to what it is in European countries. With all the stimulus it is getting closer, but we are nowhere near insolvent. Europe will fall long before we will, and that is the reason the dollar was appreciating in value up to yesterday, when the Fed clearly indicated it was willing to devalue the dollar to get us out of this mess..

  • Report this Comment On March 19, 2009, at 8:50 PM, docfoertmeyer wrote:

    Dear Marcel,

    Most people who get overwhelmed with debt will sell any asset that they may have to get free of it - if possible. Now, with all of the oil we are supposed to have under the Rockies, in Pennsylvania, under the Allegheny Mountains, and off shore why can't we sell it on the world maket to get rid of our debt - or a good part of it. We still have coal and we would have time to develope wind and solar power. We may still have some oil left but if not we could make it from coal or Algae Just a thought but maybe I am a dreamer or a senile old man (age 91).....Doc Foertmeyer.

    P.S. I forgot to mention nuclear power we could deveop and use

  • Report this Comment On March 19, 2009, at 10:19 PM, mlaursen wrote:

    re: "I don't think many people really appreciate how insidious a deflationary spiral is and the type of horrible incentives it creates in an economy."

    For example, housing prices would settle down to a sane bottom, and we could assign a stable value the mortgage-backed securities and start finding buyers for them.

  • Report this Comment On March 19, 2009, at 10:50 PM, matttheboatman wrote:

    Ok, everybody talks about this problem (the loss of the country financially) in theoretical terms. The comments I'm reading don't get to the real answer. It is like people are referring to an old text in the bible to judge whether or not you will get sick tommorrow. Come on, lets bring it down to the here and now. In my simple thinking, we become insolvent (financially bankrupt) the moment the cost of carrying the debt (interest payments) exceeds our income (tax revenues). Printing money does not change the equation. So, I ask all you smart people out there - "at what interest rate is the US insolvent under current debts and obligations?"

    If we owe $11 Trillion, and can conservatively guess that debt will grow with existing commitments to $15 Trillion, at the current rate of 3% we need $450 Billion annually to cover our nut. But, at 6% we'll need $900 Billion. And, at 10% we'll need $1.5 Trillion annually. Of course, we will need money to run the country too so anything north of $1.5 Trillion in debt interest payments will likely signal the end.

    So, in simple terms, I'm concluding that the country is bankrupt only if interest rates on our debt rise to 8 - 12%. Scary thought that only a few percentage rise can mean the end of the US as we know it.

    On the risk/reward scale, spending money we don't have seems like a bad risk.

    And, for those that say it can't or will not happen, may I suggest that history does repeat itself and many great nations have fallen under the weight of their debt.

    But, don't worry, perhaps the Chinese will take Alaska as payment in full and we can start with a clean slate????

  • Report this Comment On March 19, 2009, at 10:51 PM, Philyogy wrote:

    Well, I was brought up to think as this..

    We have a dollar.. It is worth so much...

    When more dollars are made, it makes my

    dollar worth less, as it isn't as special any more..

    since 1913 our dollar has been taxed to death..

    Heck we even still produce pennys. Back in high

    school economics, our teacher explainded that

    it takes aprox 8 cents of materials to create a penny..

    So in fact our pennys are worth 8 cents each, just

    in raw material.... We can't say the same for our

    beloved dollar bill now can we...

    I hope that the way I'm thinking is wrong, and I'll

    riding the bumps ahead.. But I don't look forward

    to heading off the cliff...

    Phil

  • Report this Comment On March 19, 2009, at 10:52 PM, Philyogy wrote:

    forgive my typing.. I even proof read the thing..

    These 16 hour days are killing me.. :/

  • Report this Comment On March 19, 2009, at 11:34 PM, JoeBachofen wrote:

    Critics who find fault with the efforts of others to solve a serious problem but who offer no solution of their own are simply parasites sapping our collective energy.

    It bothers me greatly that we are running historic deficits but you don't tax your way out of a recession. The Great Depression taught us what should not be done to rescue a faltering economy; unfortunately, it did not teach us what should be done.

    If you know what to do, please share it with all of us.

    If you don't know, then join the rest of us and try to make Obama successful. We must not fail.

  • Report this Comment On March 20, 2009, at 1:35 AM, tkochan wrote:

    Fine, yes, we all want the president to succeed. After all, this is OUR country. Few of us are being un-patriotic or wishing Obama failure in the pursuit to revive the enconomy and maintain the prosperity of our country.

    However, this is not an effort to make Obama successful; it's an effort to make our economic system run successfully.

    And, let's get one thing straight. If you love Obama, then listen up, because this means you in particular. Not all people love Obama. Got it? If this is your position, then leave it at the door, or outside by your political high horse.

  • Report this Comment On March 20, 2009, at 2:31 AM, mlaursen wrote:

    re: "If you know what to do, please share it with all of us."

    Forget about the bailouts. Let failing companies go through the traditional bankruptcy process. Let the recession play out, since the economy is an extremely complex system that cannot be fixed by top-down command-and-control tactics. Stop enabling the auto workers unions. Help out those who lose their jobs with temporary public assistance. Concentrate on long term stability in our fiscal policy. Free up the free market, keeping only a lightweight framework of effective, intelligent regulatory rules uniformly applied to all players.

    How's that?

  • Report this Comment On March 20, 2009, at 2:32 AM, mlaursen wrote:

    re: "If you know what to do, please share it with all of us."

    Forget about the bailouts. Let failing companies go through the traditional bankruptcy process. Let the recession play out, since the economy is an extremely complex system that cannot be fixed by top-down command-and-control tactics. Stop enabling the auto workers unions. Help out those who lose their jobs with temporary public assistance. Concentrate on long term stability in our fiscal policy. Free up the free market, keeping only a lightweight framework of effective, intelligent regulatory rules uniformly applied to all players.

    How's that?

  • Report this Comment On March 20, 2009, at 7:11 AM, HackMage wrote:

    The US was facing a deflationary spiral and massive printing presses were needed to spin us out of this. A lot of people like to point to the big fancy numbers the Gov. has been throwing out there to "fix" the problem, but they fail to take into account that there is ZERO velocity in this market. The Fed. could do damn near anything to M1 and literally make no impact whatsoever to money supply, because we are still in a market where no one wants to lend money to anyone, no matter what. In turn no one wants to spend money because they are fearful, and thus save their money, which just deepens the problem. This happened in the Depression and it's appearing to happen again. The worst thing people can do in deflationary cycles is to save their money, but when people are fearful, they save out of instinct.

    That doesn't mean we won't have to deal with hyperinflation within 5 years. You can read Crashproof or "What the Price of Gold is Telling Us" by Ron Paul. Both point out that the outlook for the US $ is not good in the future, but since it's pegged as the world currency, it's hard to imagine other countries not doing worse. Greenspan also questions the move away from the gold standard in his autobiography.

    More to the point, Fareed Zakaria is probably right, that in the near future we will be seeing "the rise of the rest". Every other country in the world can steal our gains in technology that we made over the last three decades, because there are no protections for our intellectual property rights. They can then use their "cheaper" labor, as compared to ours, to their benefit. Any economic system that doesn't promote the rights to property is sure to fail, even a global one. Unfortunately that option isn't on the table, so the US is gonna have to lower it's standard of living until the rest of the world can play catch up so that there is a level playing field for all workers in any industrialized country.

    Matt

  • Report this Comment On March 20, 2009, at 9:12 AM, KurtisBottke wrote:

    If I were trying to sabotage our economy I couldn't do a better job. Massive government spending, the Fed buying government debt and injecting money into the economy for the first time. This will lead to massive inflation and a debasement and eventual destruction of our currency. Our "leaders" are doing Al Qaeda proud. They couldn't be any more efficient. Because everyone in charge of our economy (Republican & Democrat) follow Keynesian economics, which has proven to be an abject failure in all it's principles and policies, our future looks bleak. The only people that know what is going on (those supporting Austrian economics) are shunned. You know what they say "garbage in - garbage out".

  • Report this Comment On March 20, 2009, at 10:56 AM, whereaminow wrote:

    Excellent reading Alyce. I'm always very happy to read your insights.

    As for some of the commentators, they make me squirm. All Alyce is trying to do is point out the most basic fundamental economic fact of life: Resources are finite, while human wants are infinte. That's just the way it goes. It's a law as sound and as sure as gravity. Thus, decisions must be made.

    All the Democrat and Republican bickering is fascinating. When you pass away, is God going to ask you what party you belonged to? Are you going to regret not rah-rah-ing your political party enough?

    I'm flabbergasted.

    David in Qatar

  • Report this Comment On March 20, 2009, at 12:56 PM, Arlechina wrote:

    Atlas Shrugged all over again. Read Ayn Rand's book and find out why the US is headed into a bad storm of our own making.

  • Report this Comment On March 21, 2009, at 6:17 AM, TyroneGenade wrote:

    Quick! Before its too late, invest in South Africa. We have gold, platinum, copper, iron, chrome and lots of sunshine. Our currency sucks (R10:$1) but that won't last. If China gets nervous about the US and the US$ it will sell it massive stock pile of Forex (i.e. US$) and that will be the end of it. Already, to front its stimulus package (which will effecitvely see China shift from an export to domestic consumption economy) it has to use its US$ reserve.

    Face it! The US$'s days are numbered. Get out while you can. The Fed/Obamanomics policy of printing money will cause inflation well above investment growth forcasts. Invest in South Africa! In a few weeks we will have wholey corrupt President which will be excellent for business.

    tt4n

  • Report this Comment On March 22, 2009, at 6:26 PM, PostScience wrote:

    Regardless of whether you agree with Obama's budget, his critics have yet to suggest a plausible alternative.

    I hear the following:

    1) Obama wants to implement "European-style" socialism.

    2) This "socialism" will cause economic collapse.

    But how is it that these European "socialist" countries continue to thrive? Been to Europe, Japan, or Australia lately? Pretty nice places for the most part!

  • Report this Comment On March 23, 2009, at 8:05 PM, RandomNY wrote:

    Ummm I guess POSTSCIENCE has actually done his own taxes. Umm PS or should I say BS.. Could you live a better lifestyle, same lifestyle, or worst lifestyle if the amount of income tax you pay doubled or tripled?

    Umm you would live a worse lifestyle...

    SO yes it will destory this country...

    so get a clue

  • Report this Comment On March 24, 2009, at 11:49 AM, RHaganC wrote:

    Solution:

    World war. go to war with the countries we owe.

    Trust me it'll work. Always has. Keeps people distracted, busy, employed, patriotic, helps population control, etc etc.

    Nastiest solution of all, but it sure would do the trick.

    Would I rather something else pan out? YES. Will it - I doubt it.

  • Report this Comment On March 24, 2009, at 2:53 PM, TradePro1982 wrote:

    I came across this superb article on how to condemn the AIG fatcats, it actually made me feel quite good. One of the best articles I have read, well worth the copy and paste.

    http://www.bukisa.com/articles/48974_how-to-condemn-the-aig-...

    This made me laugh out loud, forward to anyone affected by AIG.

  • Report this Comment On March 25, 2009, at 5:57 AM, SomeCents wrote:

    .as mentioned...."Last year's documentary I.O.U.S.A"....

    I've read through many of the comments. How many of you have watched this film? I have and I'm surprised more people have not seen it or commented. It's depressing! Sick really. It's not hopeless, but we need real leaders in Washington. Unless someone steps up soon it won't matter. We'll drown. No one's doing it.

    I attended a David Walker seminar, who's listening?

    On March 19, 2009, at 5:57 PM, Savannahboy.....Great post! I agree, but am not optimistic.

  • Report this Comment On March 25, 2009, at 2:31 PM, thisislabor wrote:

    I wasted my time to read that article on what we should do the AIG executives, and I want my 5 mins back. screw the dollar bill back, I want my 5 mins of my life back tradepro1982. 5 mins of labor is 5 more mins of labor I can pay off my portion of national debt with (about 3 years of time debt at my salary).

    Alyce interesting article, and good point. Once the interest expense is greater than the income stream we're screwed. Personally I would rather make less money and not have my credit card payment to make every month. It's easier to make less money and have no bills, then it is to make more and have a large interest payment. Damn it Obama I did not agree to this stimulus package and the rescuing of these banks! huhll....

  • Report this Comment On March 26, 2009, at 12:49 AM, yukonmike wrote:

    Two words.

    PRINTING PRESS

    Why would we ever default on our debt with this amazing device at our disposal?

  • Report this Comment On March 29, 2009, at 11:48 AM, trinitalk wrote:

    I wonder if the Government uses the parable from Luke 16. The unfaithful manager and offer discounts of 50 to 80 percent on all private debt owed the government. What will that do for our economy? A cash influx say in six months of 50% of (according to 2006 average owed the Fed’s per person $2860) about 845 billion. If the government collects 50%, nice cash hit. A new bailout plan: No free money period. Invest in small business and American families that are willing to reinvest in America.

    Criteria: Businesses and families that has existing or willing to acquire up to $400,000.00 in new debt. Use a simplified approval process (Two keys willingness to pay and ability to pay). Use of funds _ 50% of these funds can relieve existing debt. 50% business investment. (All spending must be 'Buy Local' not just America but local (respective metro areas). Fed’s will back the loans (Using half the bailout amount $350B) (186,000 families and or small business will instead be working to stimulate the economy). The buy local will improve the velocity of the dollar. The loans shall be based on four or five transfers to open market lenders with 15 to 20 year amortization. Banks will be given the opportunity to pick up the good performing loans for the remainder of the loans life. Each year strong banks can acquire proven loans from government. Not the other way around government acquiring banks bad loans. I will post the full plan on face book soon. Need to get to Church.

  • Report this Comment On April 21, 2009, at 9:14 PM, engineerthis wrote:

    Look folks,

    We could start by legalizing marijuana, yes I said it. Legalize it! There are estimates currently in the 3-10 billion dollar range. Folks, this is money that is estimated to exchange hands under our current laws. Next, we should enforce a policy that will govern US businesses and prevent tax safe havens, which alone just from our ever popular bailout banks is estimated that the US loses out on more than 30 million dollars. For too long have we opened the flood gates for illegal immigrants to come over - "We'll take care of you". There has been a flooding of charities proclaiming to help save lives in places like Peru. "Give me your tired, your angry, your poor." Folks Americans are the tired, poor, and by god, they had better be angry. Where is our children's future? Social Security - What's that?

    Our past has proven that it is only when citizens will quick acting scared and begin to get angry at our situation that we may begin to find solutions. Our country is treading that fine line not knowing whether it will end up remaining on the side of democracy, or will it fall short and we all realize that our country is a communist society. If you are a believer in the end of days - such as the prediction for 2012, then you might as well pack it in. If you are one that doesn't scare easily, then let's pull up our sleeves and dig in to fix this mess!

    Generation X

  • Report this Comment On February 07, 2011, at 12:36 AM, fuzzywzhe wrote:

    Nobody will ever read this, but I just wanted to say the National Debt will be over 33 trillion by 2020. This is assuming a 9.4% rate of increase in our national debt per year - which we've had since 1970 until today. We are actually growing at a faster rate than that today, but maybe we can trim it back to 9.4%...

    This nation will be insolvent by then.

    Somebody here was talking about states and countries being permanent. We'll be putting that to the test before too long - and I want to point out no investment has been made with our debt built up, it was just a spending spree.

    The boomers are spendthrifts, they have spent every cent of the wealth of this nation, and they spent the money of the younger generations too. You think you're owed social security? In 1980, the maximum Social Security takeout of a paycheck was $2000, and it maxed out at $50,000 a year for a salary.

    Today, the maximum takeout is $14,000, and it maxes out at $100,000 a year for a salary. You didn't earn your retirement.

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