U.S. CONGRESSIONAL BUDGET OFFICE WARNS THAT THE RISK OF A U.S. FINANCIAL MELTDOWN IS INCREASING

by Bill Baker, J.D.
Editor and Publisher, The San Bruno Beacon

Forget about the 2012 Mayan Calendar Doomsday prediction; that's a fantasy. Forget about asteroids crashing into the Earth and destroying the planet during your lifetime. Forget about Al Gore's wet dream that the Earth's ice caps are going to melt and fill your living room with ocean water.

The real threat to you and your family is that the United States is on a collision course with a fiscal crisis that will turn the value of your cash, savings, retirement plan, and any other U.S. dollar denominated security or liquid asset into worthless paper.

In a July 27, 2010 report titled, Federal Debt and the Risk of a Financial Crisis, the Congressional Budget Office (CBO) observed:

"Unless policymakers restrain the growth of spending, increase revenues significantly as a share of GDP, or adopt some combination of those two approaches, growing budget deficits will cause debt to rise to unsupportable levels......................................"

The Democrats won't stop spending and Republican pressure will not allow taxes to be raised to the suffocating levels that are required to put even a small dent in the mountain of debt the United States government is buried under.

The CBO report's debt crisis projection incorporates several changes to current law that are widely expected and will lead to an unprecedented Federal debt as a percentage of gross domestic product (GDP). To put this in perspective, the largest historical percentage of Federal debt to GDP occurred in World War II when, according to the information contained on page 2 of the CBO report, this percentage reached approximately 80%. After World War II, the percentage of Federal debt to GDP fell to approximately 25%. It is now projected that this figure could rise back up to World War II levels and beyond.

Right now, the United States government is surviving on credit. The U.S. government is paying the growing legions of highly paid Federal workers with borrowed money; the U.S. government is funding the war in Afghanistan with borrowed money; the U.S. government is bailing out the crooks on Wall Street and in corporate America with borrowed money. As a matter of fact, almost everything the United States Government now does is being paid for with borrowed money.

As anybody who has ever tried to live on credit cards knows, when debt and interest on the accrued debt pile up, you reach a point where you can no longer pay the debt and the creditors cut off your lines of credit. Not unlike the person trying to live on credit cards, the Federal, state and local governments in the United States are going to have their credit lines cut off.

It doesn't matter that the United States Treasury can print up as much money as it wants. This printed money is only as good as the full faith and credit of the United States Government. If creditor nations and other U.S. Government debt holders turn off the credit faucet, there is no credit and obviously no faith in the ability of the U.S. Government to pay its debt obligations.

The change necessary to save us from this financial catastrophe can only be accomplished by voting against the anti taxpayer politicians who refuse to stop the destructive spending patterns of the Federal, state and local governments and refuse to reduce the size of he Federal, state and local governments to levels that can be supported by current or reduced tax revenues.

Once again, the choice is yours. You can sit back, do nothing and let the same sleazy, lying, often corrupt politicians continue destroying our Federal, state and local governments or you can rise up, become politically active and help kick these bums out of office.