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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-

Tuesday, November 23, 2010

The US will default on its debt.....

The current economic crisis is the result of government tax policy that encourages spending over savings. The resulting debt build-up totalled 350% of GdP but it may not be a meaningful number.

Increasing entitlement spending will accelerate the process of transferring debt problems from the economy to the federal government.


To prevent an unending upward spiral of debt would require huge spending cuts or tax increases. The IMF report doesn't suggest that those be made immediately, because doing so might cripple the fragile economic recovery. But the report does argue that without these adjustments, government debts could become unmanageable.

To show the size of needed changes, the IMF performed one final exercise. It estimated the spending cuts or tax increases needed over the next decade to return a country's debt-to-GDP ratio to 60 percent by 2030. For the United States, the changes would amount to 8.8 percent of GDP. In today's dollars, that's about $1.2 trillion and roughly a third of the existing federal budget. But again, some other countries would face even larger adjustments: 12.8 percent of GDP for Great Britain, 10.7 percent for Spain, 13.4 percent for Japan, 11.8 percent for Ireland, and 9 percent for Greece. For France and Germany, the required changes would total 6.1 percent and 3.4 percent of GDP, respectively.
From the leftist Newsweek, here. An you foolish people that think that there will be Social security retirement income or healthcare available to you from the government, you are in for a very rude awakening. And if you do somehting so stupid as save for the expenses as a retiree, then you will be the one that will lose the benefits first!!!!! Ha ha ha.



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