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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (19400)	4/1/2009 2:54:39 AM
From: axial	Respond to of 71462

Perhaps you should read, before you write. If you followed the link upstream, you'd know that the comments and charts were by the Fed: not Obama, not Bernanke, not Wall Street. Deficits, Debt and Looming Disaster: Reform of Entitlement Programs May Be the Only Hope The "brick wall" referred to is nothing new; it's been known for years. It's a combination of many costs, including entitlement programs. It reflects increasing demand for underfunded programs by an aging population. --- "Figure 2 displays recent forecasts from the Government Accountability Office, illustrating the budget implications of these trends. The upper panel shows accelerating deficits over the next seven decades. Assuming revenues held constant at the historical average of 18 percent, these projections show the deficit rising to over 40 percent of GDP by 2080. The lower panel of Figure 2 shows the implications for the federal debt: an exponential rate of increase that reaches over 600 percent of GDP by 2080. This would far exceed any level of government borrowing in history. These projections are unlikely to actually occur. The trends are unsustainable. Long before reaching such unprecedented level of borrowing, there would surely be a crisis of confidence among U.S. creditors, both domestic and foreign. Current measures of the federal deficit and the national debt, as dismal as they might appear, fail to reflect full consequences of current-law fiscal policy. The unfunded future liabilities of government entitlement programs imply rising deficits and a ballooning public debt far larger than today’s shortfalls. And debates about the immediate economic impact of government deficits on private savings and interest rates, while of academic interest, fail to address the full importance of these long-run consequences. Fundamental reform of entitlement programs is critical for putting U.S. fiscal policy on a long-run sustainable path." stlouisfed.org --- It's a looming tragedy, beside which current issues pale in comparison. If you think this author and many others are overstating the issue, that people should just laugh it off by calling it "WMD" - that's fine with me. Fortunately, others are attempting to implement more responsible and intelligent decisions. Regards, Jim