[UnbelievingScumOnTheOtherSide]

Is there no scenario that causes the U.S. to be unable to sustain it’s continued deficit spending?

There is very little deficit spending. First, disregard government debt to itself, i.e. the SS and other bogus trust funds. The outstanding federal debt is $5.2 trillion. The FY2007 deficit was around $160 billion. However, the inflation rate is around 3%. That means the *value* of the outstanding $5 trillion fell by $150 billion. Therefore the national debt in constant dollars and carrying capacity hardly rose at all. (It did rise in real terms in FY2002-6.) And the inflation rate was not caused by the deficit (inflation continued even during the surplus years FY1999-2001 and remained constant through the subsequent large deficits.) but by expansion of the money supply due to Fed Res interest and reserve policies.

[DoughtyOne]

Thanks for the comments.

[DoughtyOne]

I believe that I commented on this post of yours earlier, but I’d like to add a few comments.

You mention a 3% inflation rate per year. That may be an accurate figure somewhere, but I’m not exactly sure where.

Doesn’t the federal government only recognize something like a 1.5% inflation rate these days? Further, do you really think it’s only a 3% inflation rate that citizens are feeling these days?

I’m not convinced at all that it’s only 3% and certainly not 1.5% With oil rising to $88.00 a barrel and the costs of all goods being impacted by transportation costs, it’s absurd to think inflation is only 3%. At least that’s the way I see it.

The products on my super-market shelves don’t seem to adhere to 3% per year. My energy costs sure haven’t. It’s hard to put your finger on it, but I think just about everything goes up more than 3%.

Of course there is one thing that doesn’t. Anyone out there getting more than 3% sallary adjustments each year? Anyone getting more than about 1-2%?

Corporations seem to think raises are a thing that went out with past generations. How long will this mindset last?

[savedbygrace]

Excellent post.