Re: Debt to GDP ratio not so dangerous
Our government CAN’T service it’s debt. Even after kicking the can down the road to our kids and to their kids.
I truly don’t think a lot of people "get" this.
This is like me getting into a life with a big house and a few fancy cars and putting my little juniors into ivy league schools and charging it all, and telling them, "Hey, when you become a doctor I’ll live over the garage and you can have all this and service the debt and maybe even pay it off".
Then one day I realize, oops, I can’t even make the minimum payment on all this debt. What do I do? Hmmm, down to the basement, fire up the HP scanner and crank out some funny money and pray to God I don’t get caught and tossed in prison, have all "my" possessions taken, then my kids are living with the in laws and I’m doing time.
Right here, right now —- That is where we are, with one big caveat, it IS legal for Ben to counterfeit money even though there are only two crimes listed by name in the Constitution and Counterfeiting just happens to be one of them.
"If" Ben gets caught YOU, ME, YOUR KIDS, MY KIDS are all TOAST! Toast as in bankruptcy vis a vis devaluation of the US dollar.
Your a or b question may not take this reality into account and therefore I don’t feel I can answer it. If you want to work this into your question I’d be happy to re-visit it.
PS You might want to look at the CBO estimated 1.86T dollar deficit for fiscal 2009 and follow closely the 100bn dollar weekly bond sales which are being held in a lame attempt to service this debt. You might also want to listen to FSN a few weeks ago where they discussed the other big ut-oh’s (50% of bond debt comes due within 12 months)
What I’m getting at: I don’t think they can kick the can anymore and I think all this is catching up with them, and sadly, us.