"Non-violence leads to the highest ethics, which is the goal of all evolution. Until we stop harming all other living beings, we are still savages" -Thomas A. Edison

Friday, September 16, 2005

Not surprizing that W didn't ask for any sacrifice last night, except for more spending cuts! He must have great confidence in the idiocy of the citizen. His grand idear is just the same old thing: compassionately spend, spend spend! No end in sight? Here is a more ominous, lucid, dissection of the fiscal clouds on our horizon: from the blog MyDD.

"At 400 billion, the US budget deficit is about 3.6% of total US GDP. And this is where the problem begins. At some time in the near future, the US will experience a recession. Why? Because all economies move in cycles. Typically, national governments increase spending during a recession to stimulate the economy, hoping to either limit the recession's impact or bring the country out of the recession into expansion.
This is where the real problem comes. Assuming federal expenditures remain the same for the foreseeable future - tax cuts remain, Iraq continues and the Federal government spends opulently on rebuilding - there is little the Federal government can do to get the US out of the next recession. Assuming things stay the same, an increase in federal spending would increase the national debt to near 5% of GDP. At this level, the currency markets will notice the US is not taking care of its fiscal house and start to sell the dollar. To protect the dollar, the Federal Reserve will increase interest rates, further slowing the economy. You get the idea."


Post a Comment

<< Home