The amount of hot air emanating from Washington DC has increased exponentially as politicians are arguing about the size of next year's budget deficit, but no matter what they decide it will be, in a word, monstrous.
To illustrate just how bad things are in the good ol' USA fiscally-wise, here's a helpful comparison:
Not fair to compare the US to Greece, you say? Correct, because the figure for Greece is for the general government, i.e. it includes all local and municipal budgets, whereas for the US it involves the federal government only.
So, yes, it's Greek to me...
So, yes, it's Greek to me...
The US can get away with this because the USD is the reserve currency.ReplyDelete
This "reserve currency" scam is effectively placing an American TAX on the entire world trade. Every time "we" need to buy oil or raw materials "we" have to earn USD to pay for it with while the Americans just have to print them to buy whatever they need.
It will stop rather suddenly.
We are already seeing the first of a series of events where USD becomes less and less desired; The Chinese export restrictions on Rare Earth's, Ukrainian wheat export ban, Export taxes on beef in Argentina and so on.
The US Dollar will go the way of the USSR Rouble and with it the US empire will die from an overdose of corruption, incompetence and fraud just like the USSR did.
It would be nice if our governments sought to extricate themselves a wee bit from the coming mess and sudden "heart-attack" in global trade. Instead they are just going 'All In' to keep the illusion going. Like the DDR towards the end.
While I generally agree with your alarming words and charts on this, I feel your chart is a little disingenuous. Featuring a bold chart that starts at 20% and ends at 30% amplifies the effect of comparing the debt levels between the 2. Yes, US debt is somewhat higher than Greece, but we have 2 things going for us, a dynamic advanced economy compared to Greece, which has basically ship-building, olives, and vacations. Also, we are the lender of last resort, whereas Greece does not ( which is why they were so hammered by bond traders).ReplyDelete
This is nothing new to you, but I just wanted to point out the bigger picture than a out-of-context graph showing 30% vs 36.5% debt-levels respectively.
Chex in Montreal
Yup, "my bad" on the graph scale, but I did it with the conscious aim of being somewhat provocative and outright alarmist.ReplyDelete
I think all of us should seriously pause and ponder what CAN happen if the rest of the world stops accepting dollars at face "value", if the "full faith and credit" of the US government ever comes into question.
Just as it did in Greece, for example... but there can be no larger entity to bail out the US, as there is for Greece.
Greece is a user of currency. The US is an issuer of currency. Different constraints. Comparing the two is not appropriate. (This is not an endorsement of US fiscal affairs!)ReplyDelete