This article in The Australian today is mind-boggling. If true (and I have no reason to doubt the facts it cites), then the world is in for a huge shock in the coming years. Maybe sooner than we anticipate. Imagine if USA became Greece. Imagine if USA became USSR (which it is perilously close to becoming, due to an endless surge of socialist policies).
I'd not touch the US dollar with a broomstick. Sell the Bernanke Ponzi scheme before it bites you.
Drowning in debt: US crisis lurches closer
by: Satyajit Das, October 29, 2012
Whoever wakes up in the White House after the inauguration ball will have to soberly confront the ugly reality of US government's debt levels, which totals about $US16 trillion ($15.4 trillion). There are other current and contingent commitments not explicitly included in the debt figures: US government support for Freddie Mac and Fannie Mae, government-sponsored enterprises of more than $US5 trillion, and unfunded obligations of more than $US65 trillion for programs such as Medicare, Medicaid and Social Security. US state governments and municipalities have more debt, about $US3 trillion. [Sanjeev: this comes to around $88 trillion.]
Federal Reserve chairman Ben Bernanke told the house financial services committee the US faces a debt crisis: "It's not something that is 10 years away. It affects the markets currently. It is possible that the bond market will become worried about the sustainability (of deficits over $US1 trillion) and we may find ourselves facing higher interest rates even today."
Given 45 per cent of households do not pay tax and 3 per cent of taxpayers contribute about 52 per cent of total tax revenues, a major overhaul of the taxation system would be necessary.
Successive US administrations have sought to avoid dealing with the US debt problem. But as English writer Aldous Huxley observed: "Facts do not cease to exist because they are ignored."
