Can America Go Bankrupt?

Please fasten your seatbelts!

I find it interesting that some people reason "well, we've been in debt before and came out alright we'll do it again." Trouble with that logic is the US spending with the wars, bailouts, stimulus, Obamacare, etc., is unprecendented --- we're working on 14 trillion now and climbing. The politicians just want the masses to be happy while their in office so they concoct all these aforementioned schemes to pacify a not so bright populace into thinking they have the answers... that they're actually smarter than all of us out here. They use fear, massage the data, spin with the media, etc., and "we're the experts, trust us" to coerce the majority into believing all this nonsense. It might suprise them that some of us can do the math and have a strong grasp of linear relationships.

David Lewenz (above comment author) is correct and points out some very valuable information for people who are willing to listen.

Michael above... well his seatbelt is not fastened and when the house of cards crashes, Michael will instantly realize he should have paid more attention to the math. It will be a quick end for him though.

The US government "deficit credit card" is being run up... way way up... with seemingly no credit limit. I know my credit card company is smart enough to put a credit limit on my card... but "we the people" don't think it's prudent to limit the amount of credit (via our future tax dollars) our elected officials can spend? One day the deficit "credit card company" will demand to be paid-in-full; guess what happens then.

Ross of NE @ Oct 29, 2009 10:57:14 AM

America is broke

The American Government has got it self pinned against the wall, if you look at the unfunded liabilities which now total 60 trillion dollars, Social Security, 10 trillion, unfunded medicare and medicade 40 trillion and under funded prescription drugs of 8 trillion. Underfunded means the government has printed the money and left an IOU in each funds account, This makes Bernie Madoff look like a prince.

Now lets look at current burn rate of the government, collecting less then 1.8 trillion in tax revenue and spending 3.3 trillion. 12 trillion of national debt that is underwritten with T-Bills. The government is just 6 weeks away from starting its new budget for 2010. Projections of deficit spending 3 trillion may be more, based on jobs recovering or not.

We have maybe two years, before this blows up! A blow up is when the fed has to raise interest rates to attract buyers of our bonds or T-bills.We are getting really close to that date. At some point the world will say, can you really pay back all that money, Which is now at 249,000 dollars for every man women and child. Since we stopped funding our debt with long term bonds and moved in the Clinton admin to short term bonds, we are really in a pickle.

From a budget stand point debt interest is the fourth largest expenditure 330 billion, but as interest rates go up coupled with 3- trillion of added debt each year, Debt interest could become the number one cost to run our government is five years.

David Lewenz of FL @ Sep 14, 2009 06:50:25 AM

democrats always brought us out of recession! LMAO

To whomever it is that wrote:

'This cycle has for the last 150 years always been brought on by the Repuclican party and it has always been the Democratic party that has brought us out of recession. I would need weeks to explain the ins and outs of this suffice it to say do your homework and you will see I am right on this summation.'

You don't know WTF you are talking about. I don't have to do but five seconds of "homework" to know that the recession that began as a result of the dot com bubble that happened on Bill Clinton's watch.

Lay off the kool-aid.

michael of TX @ May 11, 2009 14:22:57 PM

Nostradamus and the COLA

The COLA is only a partial COLA. It is 1% below the inflation rate. Yet, it takes more than a 10% raise at the start of a year to cover 10% inflation throughout the year. So, after about ten years with the current COLA formula, will the purchasing power of ALL FEDERAL RETIRESS and SOCIAL SECURITY folks decrease by 25%? Here is the scenario, double digit inflation with a corrupted COLA formula, and Social Security along with the military retirees entitlements will be cut in half, then to a quarter, then into nothing. That is what I see as the end result.

Nostradamus of FL @ Mar 22, 2009 13:48:50 PM

missing the point

people people people the point he is trying to make is that government is like a hedge fund or an insurance policy which is completely not american if you make a mistake or bad investment it is your responsabilty to fix it not big bro without the risk you loose track or appreation of the reward which is freedom to succeed as well as fail we are all created equal equally prone to success or failure we dont need more govt and taxes we need less to fix this problem gov spending just prolongs the enevitable how thin can we be stretched we need to leave the market alone that way the people who are hedging on the market to go down will loose their ass and prices will find them selves this short money is the wrong idea for a sustainable economy people need to invest in things like commodities and stable slow growth ideas not rich over night because if we want the gov to solve all our problems it creates more debt wheather your an elephant or a donkey is as short sided as many peoples investment ideas we will pay for our problems one way or another its a matter of time we are a republic not a democracy ruled by laws to keep the gov at bay the more power we give thees leeches the more power they will take we are not entitled to this bill of goods we are being sold we need to work for prosperity not expect someone else to bestow it on us with a credit card or line of credit etc less is more tortise and the hair that sort of thing if you think that this problem is only eight years old get a grip people have been hedging for too long and its time to call in all bets it took a while to dig this hole and it will take awhile to get out of it we are basically paying off a maxed out credit card with another card the new american way a fix over night is too good to be true "ask not what your country can do for you but what you can do for your country"(JFK) oh yea and buy american

chris walter of CA @ Oct 16, 2008 03:29:43 AM

Recession and Depression are just cycles

I often am amazed at such comments in general and the lack of faith people have not just in their country but in themselves. This nation has faced 32 recessions two of which were depressions. We have survived them all. To determine bankruptcy is to be unable to pay for the debts one has incurred this is the simplest defintion and the U.S.A. simply doesn't qualify. The states have yet to come close to realizing maximum potential. We certainly haven't started selling off land holdings to the highest bidder yet. Well maybe if Govenor Palin had her way we might have sold Alaska recently but that is another story.

Perhaps the old adage is true that fear creates panic and human beings are fearful creatures.

To compare the states to Rome falling is also silly because we are no where near the end.

We are facing a recession folks and most likely the worst one since the depression of 1929. But is won't be a drpression just a very deep and painful recession. We will recover and this is not wishful thinking rather a basic mathematical certainty. Remember the folks in the Great Depression of 1929 never thought they would make it through and thought it never happened before but the Greater World Depression of 1873 lasted 20 years whereas the Great Depression of 1929 only lasted 10 years.

One fault we have in the states is that in High School we don't require students to read learn and understand Benjamin Grahms "How to Read a Financial Statement" if we did then we might alay such radical fear and panic in the markets when recessions come. Nor do we teach enough political and financial history to prepare students for all eventualities and inevitabilities.

Recessions are like the seasons they come because they are a natural cycle of capitalism. This cycle has for the last 150 years always been brought on by the Repuclican party and it has always been the Democratic party that has brought us out of recession. I would need weeks to explain the ins and outs of this suffice it to say do your homework and you will see I am right on this summation.

We are in an financial and inflationary recession this time folks and financial recessions are the most painful and longest. Don't expect this to be over in a year or two rather think 3 to 5 years. But end it will as 150 years has proven.

The good word said there will be 7 years of feast followed by 7 years of famine so be prepared.

Allen Miller of NJ @ Oct 10, 2008 18:02:13 PM

usa and bankcrupcy

I agreee with all what you said in this article.

I would go even further I think current administration not only messed up economy but they are also the potetential criminals .

They bombed estimated 100000 people who have nothing to do with 9/11 plus they lost 5000 soldiers on war based on lies.How this can escape the media and people .

Just imagine if the other country bombed "wrong" country and killed 100000 people in the process and started ocuupation "forever" .What USA would do to them ?

(Kuweit and Saddam is a good example)

Why the world is silent about it ?

I read at least 10 books on ths subject but none of them points to potential criminal investigation .(Clinton/Lewinsky did cost millions on trivial charges).There is something wrong with this picture.

Could you transalte these debt numbers per capita?

How they look against GDP.

Is it $60 trilion divided by 330 million =

Why US citizens are still blind making dems a tie with party which did so much "evil "?

Jerry Kostanski @ Sep 09, 2008 17:24:37 PM

Where do we go from here?

I'm pro American, this is my homeland, I'm also pro family, I an effort to protect my family, I will be looking for a more secure financial county to continue it's maintenance and growth.

At age 43yrs, I never thought I would be thinking of leaving home for good. If it were only me then I would stick it out.

Amos of FL @ Aug 06, 2008 17:48:00 PM