Bear in mind that US debt is already $19+ trillion and climbing. The CBO sees at least another $10 trillion in debt in the coming years, and projects that the US budget deficit will increase every single year.
The evidence is already so clear.
Military retirement spending rose by 8.7% last year. Medicare costs were up 10%. Certain government employee benefit programs rose by 17%.
Overall mandatory outlays rose on average by 6.6%, three times faster than US GDP.
So essentially the US government’s spending growth is far outpacing US economic growth.
It doesn’t take a rocket scientist to see how dangerous this is.
The ideas that debt must someday be repaid, and that it can’t keep growing faster than the underlying income that will service it, are quaint notions that have no relevance it this day of brilliant central bankers and economic planners. From Simon Black at sovereignman.com:
According to Jacques Necker, everything was just fine.
The year was 1781, and Necker, France’s finance minister, had just published a report called Compte Rendu au Roi, an accounting of French public finances.
Necker’s report showed that, despite extraordinary public services and military spending, France had a net credit position of +10 million livres.
In other words, the country was in perfect fiscal health.
It turns out that Necker had cooked the books.
Rather than being 10 million on the positive side, France had racked up 520 million livres worth of debt and could no longer afford to pay interest.
France had spent decades accumulating…
View original post 440 more words