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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Monday, May 10, 2010

U.S. Debt Shock May Hit In 2018, Maybe As Soon As 2013: Moody's - IBD - Investors.com

This article says that the rating agencies are looking at a statistic, interest on debt as a percent of tax revenues, as one of the key determinant of setting the quality rating of United States government debt. Interest on debt will grow from below 10% to more than 20% in a very short period of time. This is the slippery slope since these numbers assume that that there will not be a change in the economic growth trajectory of nation as whole given profligate government spending that promises of massive future increases taxes that may squeeze the ability of the nation to create and grow. I do not foresee an ability of the nation to extract itself from this pathway as government is not longer in the business of governing but in the business of taxing and redistributing wealth as elected officials see fit.

I think that the nation will hit the debt wall well before the rating agencies get around to downgrading the nations debt quality rating. One morning we will wake up and realize that the market is much bigger than any government has the ability to control.

The nearly 80 year mandate creep from being a government to being a Utopian wealth redistribution mechanism will eventually create an untenable condition where either entitlement promises will be broken or taxes will rise to destructive levels. It will no longer be the America that was so successful in the past but one where different groups will be demanding their piece of the pie that will be distributed from the central government Komissar. Its a worthless way of living.

U.S. Debt Shock May Hit In 2018, Maybe As Soon As 2013: Moody's - IBD - Investors.com


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