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Thursday, 22 January 2015


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I believe the debt is at a point of no return - in excess of the abilities of anything other than extraordinary growth, which is no longer possible in a global economy. I think the only way out of it is serious tax reform, and there is no way the rich will stomach that. I do not believe we will see a US default in our lifetime (given they can print money), I do think there will be a liquidity collapse when other nations decide not to hold any more US debt. That will not be until Chinese growth slows, perhaps at the end of this decade.


I saw this comment: "we should have made clear the difference between the federal deficit and the federal debt. A deficit occurs when the government takes in less money than it spends in a given year. The debt is the total amount the government owes at any given time. So the debt goes up in any given year by the amount of the deficit, or it decreases by the amount of any surplus. The debt the government owes to the public decreased for a while under Clinton, but the debt was by no means erased". Perhaps the diagram should have been labelled debt? In any case, both debt and deficit have blown out of all proportion now after Bush (Republican) and Obama (Democrat).


Btw, I thought Clinton got the budget back into surplus, the last president to do so. Researching this finds lots of Republican ratbag publications trying to disprove this embarrassing fact. I assert he reduced the deficit so I now question your chart. Was it designed by a certain Lord Monckton?


I think "crime doesn’t pay after all" should be "crime does pay after all".

I love to regularly check http://www.usdebtclock.org/index.html and watch the millions click by.

The most amazing thing about these modern economies is the way the practitioners say "This is just the way it works" until it doesn't. As long as China wants to keep buying US debt, everyone will keep playing the game. Should China's growth stutter, we will see a domino of collapses to equal that of the declarations of war in 1914. That is the day we buy tinned food!

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