Presidency in the United States

Defining and getting a great president.

u-bam-a, The Budget And The Deficit

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In u-bam-a’s first term, the government borrowed about 40% of the money spent by the federal government each year.  The total borrowed was approximately $ 5 trillion.  This is a 50% increase in the federal debt in just 4 years.

If this continues over his second term, the total federal debt will have doubled in just eight years.

Each year the amount of interest paid on the debt increases.  If interest rates rise, the government will pay more interest on the same debt.  Right now interest rates are very low.  Interest rates could easily double or triple.

The United States is spending about $ 400 million a year on interest.  This is about 30 to 40% of the annual deficit.  With higher interest rates, the annual deficit could easily double.

If the economy continues to fall, tax revenues will decrease causing the deficit and the debt to grow even faster.

One has to ask whether the US reached the critical tipping point. Beyond the quantitative measurements associated with government deficits and debt, there exists a qualitative aspect to such a scenario that may be far more important. The qualitative perceptions of fiscal and monetary policies are impossible to control once confidence is lost.

This means that if the buyers of government debt lose faith in the government, they could stop buying government.  No more borrowed money for the government would cause a huge, forced cut in government spending.

The federal government has a serious budget problem.

It is clear u-bam-a is taking the nation in the wrong direction.

Politicians are not going to do anything about this.

It is up to each individual to do what is necessary!

 

 

The facts no one wants to read.

Comments and referrals to this blog would be greatly appreciated

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Written by solutions777

August 10, 2013 at 6:58 PM

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