Is The U.S. Too Big To Fail?

With its bailouts, stimulus and what has now become its perpetual wars and endless massive weapons programs, the U.S. is racking up debts at an astounding rate. How fast? Please see usdebtclock.org/

Where is the money coming from? It is being borrowed at an equally astounding rate ($166 billion the week of 5/24/10 alone, a near all-time record). Because even that is not nearly enough, money is also being printed out of thin air by the Fed.

How bad are the U.S.'s debts? It already costs nearly $400 billion a year just to pay the interest on the current debt* and that number is rising fast. Even if not another penny is borrowed, imagine how high it will go as interest rates rise.

That's the spending side. How about income? For every dollar the U.S. government spends, it takes in just 61 cents.* This is a recipe for disaster! America will soon be confronted with the horrific choices the Europeans face but on a far grander scale.

There are two possible answers to this dilemma. One is to sharply raise taxes to pay for all of this spending. But most people strongly oppose this approach and despite the mounting bills, some politicians actually want tax cuts.

The other answer is to slash spending. But where will the cuts come from? How about from the Defense Dept. and its many contractors? But Congress views them as untouchable because they employ millions of Americans in high paying jobs, and virtually every Congressional District has some of those jobs. Unfortunately, those high paying jobs are all at taxpayer's expense.

How about from social welfare programs such as Medicare, Medicaid, Social Security, the still largely undefined Obama health care reform program and Education? But those are the programs that most affect the young, the old, the poor and working class families, the latter of whom pay most of the taxes. Cutting those programs would be political suicide and politicians won't want to touch them.

How about slashing government employment, the biggest jobs program in the U.S.? But as we've seen in Greece and will see elsewhere in Europe, their unions will never allow it and they will strike, bringing much of the U.S. to a stand still.

So where will the cuts come from? If you have a better solution, please voice it. But otherwise the U.S. has driven itself off a cliff and there will be a crash at the bottom and the fiery explosion that will follow.

Or, instead you can buy into the U.S. government's fantasy of a current "sustained economic recovery gaining traction" and do nothing. But that's like being on board the Titanic after it hit the iceberg, denying the flood of water rapidly overtaking the ship and for a time, continue steaming merrily toward the port of New York.

Assuming you're not among those in denial, there is still very good news for the U.S. has a very bright future. As in the Great Depression, Americans will unite to help one another get through the harsh times.

When the rebirth of America begins, it will be led by the Silicon Valley, that created top companies like Apple, Cisco, Facebook, Google, Hewlett-Packard, Intel, Oracle and many other successful firms that provide millions of productive jobs that help to make the world a better place. With global warming, pollution, hunger and sickness crying out for innovative solutions, their creativity couldn't come at a better time.

Dick
*Statistics from the Bill Maher Show, 4/23/10