The bozos in Washington who are our elected leaders are still playing fast and loose with the facts, our finances, and the future of this country. The truth is not in them - on both sides of the political aisle.
I was going to post a long screed about the truly disastrous situation in which this country finds itself . . . but why bother? Those of you who are regular readers will know I've been saying it for years now. Those who haven't will find plenty in the archives on that subject. The only faint glimmer of . . . not hope, not light, but at least schadenfreude, is that things in Europe appear to be even worse - so much so that European capital is in flight to the USA! When even our terribly injured financial system appears to be a safer haven than Europe's, that says a whole lot, right there.
For those wanting some very dismal - but entirely factual - articles about our current situation, here are a few links.
Karl Denninger - To Both Left And Right: STOP LYING (Debt)
Karl Denninger - Numbers On The Debt: Who Are These Clowns Trying To Fool?
Casey Research on the collapse of currencies, and how the dollar might follow suit
John Berlau - The Constitution on debt
New York Post - Rotten (financial) advice from Europe
All are worthwhile reading, even though you risk indigestion and/or migraine headaches from the undeniable facts they contain.
Folks, unless our politicians get their act together, the following sequence of events is now inevitable and unavoidable:
- The US government fails to put in place measures to deal with its ever-mounting indebtedness.
- Standard & Poor and other rating agencies therefore downgrade the credit rating of the USA.
- Immediately, the cost of US government borrowing from investors in its bonds (and all commercial and private borrowing as well) goes up. Even if the Federal Reserve institutes another round of so-called 'qualitative easing', printing dollars to buy bonds, it won't help - it'll simply drive inflation through the roof.
- I don't believe the US Government will default on its debt, but I do believe that inflation will run rampant through the economy as more and more fiat currency is put into circulation. This will eventually reduce the national debt to manageable proportions, as it can be paid off in inflated dollars - but it will also destroy (not damage, destroy) the middle and working classes in this country.
And all this will happen because our politicians can't find the courage, and honesty, and willpower to tackle the problem confronting us right now. This is just about the last chance we're going to get. As Karl Denninger points out:
This, my friends, is why we must stop the deficit spending now. I know doing so will suck. But it was going to suck in 2003, but we refused to stop. It was going to suck worse in 2007, and we were told this was a "short term" thing to "help the economy." We're now almost four years into this and there has been no cessation or slowdown in the deficits.
The problem is that all this "charging it" hasn't actually helped the economy, and if we don't stop it now we're taking the very real risk that we will lose the ability to control the outcome as the market will call "BS!"
Once it happens it's too late to change course.