Will the Debt Binge end?
Our Debt Binge Is Ending — And The Middle Class Will Get Clobbered
Excerpt:
The US's $1.6 trillion-a-year deficit, Mauldin believes, must quickly be cut to about $300 billion a year, or the US will face a debt crisis. And given that our current government can barely find ways to chop $30 billion of spending from the 2011 budget, these cuts are going to be painful.
What will the forced austerity mean for ordinary Americans?
Higher taxes and significantly reduced Medicare and Medicaid spending, for starters, Mauldin says. And then cuts to almost everything else in the budget, including military spending and education.
In other words, as has so often been the case in the past couple of decades, the middle class will bear the brunt of the impact.
Comment: Question: "Will the Debt Binge end?". Answer: "Well its got to or we will be bankrupt!"
Or, put differently, the debt binge will end someday, and likely someday soon. The question is not whether it will end, but rather whether it will end with minor or major trauma.
ReplyDeleteMy prediction: major trauma.
ReplyDeleteWe could (the USA) be in a position where we could not afford to go to war (a just war - not the needless intrusion into Libya). We could have a significant natural disaster (eg a major earthquake in CA or a volcanic eruption near Seattle) and not be able to pick ourselves up after it.
I think it is possible that you could have a major state - say Texas - successfully secede from the union.