Even if all U.S. citizens were taxed 100% of their income... it would still not be enough to balance the federal budget! We'd still have to borrow money, just to maintain the status quo.
That's absolutely incredible, isn't it?
And right now, today, the federal government has to borrow 46 cents of every dollar they spend...spending that stands at a staggering average of $435.8 million per hour. How is that possibly sustainable?
Today, we have more government debt than any country in the history of the world. We have more debt than every country in the European Union... combined.
With each additional commitment we sink further and further into debt... closing in upon the moment that we can simply no longer afford even the interest payments on our obligations.
And here is the part that really matters... the costs of maintaining our debts are about to skyrocket.
Right now the Federal Reserve is manipulating interest rates down to almost zero. As a result, the interest rate at which our government can borrow money is at a record low level. In fact, the Federal Reserve has lowered its benchmark interest rate ten times since August 2007, from 5.25% to a zone between zero and 0.25%. Obviously, the current rate won't last forever.
But what will happen if the average real interest rate ends up being just 4% annually, and we pay it off over 30 years like a mortgage?
Incredibly, we'll spend $34.3 trillion to simply repay what we owe right now. If the rate ends up being 6%, we'll spend $43.1 trillion.
With each additional commitment we sink further and further into debt... closing in upon the moment that we can simply no longer afford even the interest payments on our obligations.
And here is the part that really matters... the costs of maintaining our debts are about to skyrocket.
Right now the Federal Reserve is manipulating interest rates down to almost zero. As a result, the interest rate at which our government can borrow money is at a record low level. In fact, the Federal Reserve has lowered its benchmark interest rate ten times since August 2007, from 5.25% to a zone between zero and 0.25%. Obviously, the current rate won't last forever.
But what will happen if the average real interest rate ends up being just 4% annually, and we pay it off over 30 years like a mortgage?
Incredibly, we'll spend $34.3 trillion to simply repay what we owe right now. If the rate ends up being 6%, we'll spend $43.1 trillion.
Even as late as the 1970s, America was the world's largest creditor. But by the mid-1980s we'd become a debtor to the world. And since the late 1990s we've been the world's LARGEST debtor.
Today, our government owes more money to more people than anyone else in the world.
With all of these bad debts piling up, we've had to begin repaying our debts by printing trillions of new dollars.
With QE3, the latest round of "quantitative easing," the Fed is now promising to print $85 billion a month. That's over a trillion dollars a year.
Today, our government owes more money to more people than anyone else in the world.
With all of these bad debts piling up, we've had to begin repaying our debts by printing trillions of new dollars.
With QE3, the latest round of "quantitative easing," the Fed is now promising to print $85 billion a month. That's over a trillion dollars a year.
