Re: Heartburn of the Day

On Jul 3, 7:07 pm, John Larkin
<jjlar...@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx> wrote:
On Mon, 02 Jul 2007 18:48:17 -0700, MooseFET <kensm...@xxxxxxxxx>
wrote:



This time they seem to have timed it just as the chickens are about to
come home to roost. We are seeing a rise in raw materials right now.
Soon that will ripple through the economy and a slowdown will happen.

The US has had record low interest rates and massively imbalanced
budget. Both are strong stimulants to the economy in the short run.
Unfortunately like a speed addict, it takes more and more each year.
When the US's credit runs out or something else forces the budget to
go towards balanced, there will be a cold turkey reaction. The ones
who set the US up to fall will attempt to shift the blame as usual.
With luck this time that too won't work as well.

US public debt, relative to GNP, is simular to that of several
european countries and below that of Japan. One significant difference
is that most european countries have massive unfunded pension
committments (which the US does not) and a severely aging population
(ditto.)

They have two broken legs and the US only has one.

The US does also have massive unfunded pension committments. Not all
of them are currently government pension funds. There are many
company plans that are not properly funded and can't be supported by
current incomes. As they fail the burden is placed onto the federal
government via the Federal Pension Benefit Guaranty Corp.

The figures for the "national debt" can't really be trusted because of
the way it is accounted for. The debt only includes those bills that
have come due and the government had to borrow to pay. It doesn't
include all of the bills that todays actions will cause in the
future. If they order 100 aircraft, for example. All governments
hide the true extent of the debt (with the posible exception of
China). Some may be doing a better job of hiding it.


.

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