Skip to comments.Schiff: America is Already Bankrupt
Posted on 05/30/2012 9:54:39 AM PDT by Hojczyk
The man who forecast the end of the housing bubble in his book Crash Proof says the housing implosion wasn't his primary concern. "I was worried about what was going to happen when the government tried to reflate the bubble." The ensuing meltdown is going to result from the cure, not the original disease.
Schiff says the Congressional Budget Office (CBO) got it exactly backwards when they issued warnings that the U.S. would slip into recession if we reached the debt ceiling early in 2013. America literally can't cut spending fast enough; a recession now beats a depression later.
"Right now the government can spend as much as it wants because it can borrow." But there's a limit. Once U.S. interest rates are forced higher by concerned lenders, the party is going to be over for the U.S. Of course, there's no actual deadline for when those rate spikes happen. Currency and debt are relative, and the U.S. remains a relatively safe bet.
"The worst that can probably happen in the short run, if you're trying to keep the bubble going, would be some kind of resolution in Europe. If Europe actually gets its house in order, then we're really in trouble."
As Schiff views it, America's in much worse shape than Europe. What's saving us is that the problems over there are providing enough of a distractionor are at least making the U.S. look good enough by comparisonthat the Fed can keep rates near nil.
According to Schiff, the hangover from our money party will be hellish.
(Excerpt) Read more at finance.yahoo.com ...
Mob rule is now the law of the land.
Is there some sort of MSM rule where first names cannot be used? If they are trying to reveal the “who” of the story they have failed right out of the box. Should have been in the first line.
...as if we didn’t already KNOW we were on the downward path to bankruptcy.
Not true. The deficit for FY 2013 will be $901 Billion and $668 Billion for FY 2014. This is a significant improvement over the $1,327 Billion for FY 2012. The next important step is to grow the economy and get the unemployment rate to around 5% or 6%.
” The next important step is to grow the economy and get the unemployment rate to around 5% or 6%.”
Are you insane? Obama has regulated us into hell!
How would YOU grow the economy?
LOL. That’s the projected deficit. It could be higher. And is it based on the Bush tax cuts being extended or cut? On the enactment of Obamacare? On payroll tax holiday being lifted? There are lots of assumptions to reach those figures.
First off, with US debt-to-GDP above 100%, a $668 billion deficit is unstustainable. The chart has it finally leveling off at $500 billion. Still unsustainable. When debt is greater than GDP, you have to drastically cut spending or you enter a downward spiral. No one is proposing true spending cuts.
Second, you say "the deficit for FY 2013 will be." Will it? I don't have a crystal ball myself, but based on Boehner's actions so far, my guess is he folds like a cheap suit. Romney, if he wins, displaned no tendency in Massachusetts to govern any differently than Obama has so far.
The USA is like that family in 2008 riding a wave of fake prosperity based on credit cards and helocs.
“This is a significant improvement over the $1,327 Billion for FY 2012. The next important step is to grow the economy and get the unemployment rate to around 5% or 6%.”
LOL!!!!what turnip truck did you just fall off of?!!Or are you posting from Obama’s press office this afternoon newbie?!!!
“First off, with US debt-to-GDP above 100%”
67% of the national debt is held by Americans. The national debt (gross federal debt) is $15.8 Trillion. $11 Trillion is public debt and $4.8 Trillion is intragovernmental (money the government owes to itself). $5.9 Trillion of the public debt is held by Americans and $5.1 Trillion is held by foreign countries. The dollar is the reserve currency of the world. We have the ability to print as many dollars as we want.
If the Saudis and the ChiComs cannot continue to sell to the US and Europe, their own people will rise up and start beheading the leadership within weeks.
They have every incentive to continue shipping to us and to keep taking our money and pretending that its worth something.
That has all been a head game since we went off the gold standard anyhow. It’s like the old Peanuts strip. “Why are the mountain climbers all tied together? So that when one falls, they ALL fall”.
I've heard that the word "recession" is merely a euphemism for "depression". If that is the case then the validity of this entire article is suspect.
Why does that remind me of "famous last words"?
“The dollar is the reserve currency of the world. We have the ability to print as many dollars as we want.”
You’ve put your finger on one of the reasons having the reserve currency is important. At the same time, you’ve hinted at why that status might not last.
I see we’re on the same wave length.
I’ve got this bridge for sale. Cash up front and I’ll give you 20% off asking price.
“We have the ability to print as many dollars as we want.”
You posit that “ability” as it it is a good thing.
Wanton disregard for that capability, along with truly lunatic levels of spending, are the principal mechanisms for the historically unprecedented fiscal hole in which we find ourselves.
It’s more of a language change over time. In the early part of the 1900s they used the word “depression” for a downturn. At some point, they changed to “recession” and at that time, yes, it was just a euphemism.
These days, recession is more or less defined, and depression is not so much, but generally used to refer to a really substantial, prolonged downturn (such as the one, IMO, history will show we are in right now).
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