Submitted by: Donald Hank
The lesson we were supposed to learn from the Soviet Union, Cuba, North Korea, Mao's China, etc, was that socialism, ie, a command economy, can never work under any circumstances and never has. Note the extreme diversity of the conditions, economic, cultural, linguistic, etc, in just those 4 examples. That's all the trappings of a controlled experiment and the disastrous results have been IN for decades.
Yet to hear the Democrats talk, you'd think those planned economies were just the greatest and the results couldn't have been better.
What's worse, as we import these failed ideas to our shores, we are seeing the most grandiose colossal economic and financial flop the world has ever known.
Experts of a wide variety of backgrounds are unanimous in this assessment.
Why don't the graduates of our most expensive institutes of higher indoctrination -- oops, I beg your pardon, learning -- understand basic math?
Will hunger be our final teacher? Did it have to come to this?
The Bitter Fruit of Insolvency
Steve McCann
Excerpt:
If a nation wishes to maintain its solvency and continue to expand its economy, it should not experience deficits higher than 3% of its Gross Domestic Product and, in today's quasi-welfare societies, unemployment rates above 6 to 7%. On an aggregate basis, a combination of these percentages should always remain below 10. The higher this "National Insolvency Index" above 10, the greater the problems that country is experiencing, and if that index remains above 10 for three years or more the viable solutions to solve the dilemmas will be increasingly difficult to enact.
The United States has not only one of the worst National Insolvency Indices in the world since 2009 -- the year Barack Obama assumed office -- but the most dismal picture imaginable over the next ten plus years assuming nothing is changed.
The Obama Years:
2009 | 2010 | 2011 | 2012 | |
Insolvency Index | 19.1 | 18.5 | 20.2 | 18.0 Est. |
The average for the eight years of George W. Bush : 7.4
Per the Government Accountability Office for the estimate of future annual budget deficits and the Congressional Budget Office for their estimates of future unemployment rates (it should be noted: the CBO notoriously underestimates), the next 10 years are as follows if no massive and dramatic changes are made:
2013 | 2014 | 2015 | 2016 | 2017 | |
Index | 14.7 | 14.3 | 14.0 | 13.5 | 13.8 |
2018 | 2019 | 2020 | 2021 | 2022 | |
Index | 14.0 | 15.0 | 15.5 | 15.8 | 16.3 |
At no point from 2009 to 2022 and beyond does this index fall below 10. A disaster of monumental proportions is in the offing, and the optimistic outlook by the Congressional Budget Office that the unemployment rate would be at 5.5% by 2016 will never happen making the index even worse than the above chart.
At no point from 2009 to 2022 and beyond does this index fall below 10. A disaster of monumental proportions is in the offing, and the optimistic outlook by the Congressional Budget Office that the unemployment rate would be at 5.5% by 2016 will never happen making the index even worse than the above chart.
Over this period from the end of 2008 to 2022, the national debt held by the public as a percent of the Gross Domestic Product will grow from 42.0% to 125% and interest expenditures from 1.4% of GDP to 3.9% (in terms of 2011 dollars that is an increase from $200 Billion to nearly $600 Billion or 64% of the total individual income tax receipts by the IRS in 2010.)
This is why S&P has downgraded the creditworthiness of the United States and in reality should follow up with another more dramatic downgrade soon.
After World War II the United States became the greatest economic and military power the world has ever seen. This accomplishment happened in the period 1947 through 2008. The National Insolvency Index for the country averaged 6.9 over those 61 intervening years. It will average 16.0 from 2009 through 2022, far above the threshold of 10.
The urgency of reversing this index cannot be overstated; the United States is firmly on the path of becoming the most massive economic and financial failure in the history of mankind. The credit downgrade is a shot across the bow, not a political or ideological ploy. Will the current American ruling class and the average American citizen glued to the television begin to wake up and understand that he or she is living a tragic reality show in which everyone and everyone's progeny will bear the burden of a dramatically reduced standard of living and a country at the mercy of others?
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