The national debt is a good question. We're approaching a national debt that's equivalent to our GDP. It's really uncharted terrority and economists themselves are having disagreements on where the point of worry should be. Some say we're there, some say we're getting close, others still say we're far away.
Examples can be a very good indicator. Take a look at this and notice who's in trouble, and who isn't and what debt:GDP looks like:
http://usdebtclock.org/world-debt-clock.html It's really two functions you have to concern yourself with, the devaluation of the fiat currency and what is it costing that country to service it's debt. When you consider the size of the US GDP engine, the world can not afford to finance it for a significant length of time. The one variable that isn't talked about much because it is such a looming destructive force is the interest rate of that $15T and growing debt. It's rather shocking to remember only three years ago it was only $10T, but the eye watering growth of borrowing is having an effect on the value of the US dollar as well as consuming so much of the available capital of the world to fund it, the Fed is slowly losing the ability to dictate the interest rate it will pay on the debt. This will yield to a much higher interest rate as the value of the US dollar declines and the world wakes up to the fact the US will either have to default on it's debt or suffer massive devaluation, either way their capital investment in the US is at risk as the finance sharks begin to circle a bleeding county as they are doing to Italy/Greece/Spain. Five years ago that would be almost unimaginable but now it's appears to be a certainty and the only guess work is when will it happen.
People often say we should run the government like we do a family. However, families do not run such that all bills (debt) and all income (GDP) are equal. In fact they're much 'worse off.' Many familes have a house (debt) that's 5x or more than their yearly income (GDP). And that house isn't all the debt as they often have cars loans and credit cards. So a family isn't bankrupt when they are unable to pay all debts within a year. Not sure why the government should be either. (Though as a side note I do agree we should reduce our debt load. )
We see this happen to families all the time, debt runs away and the interest rates soar compounding a nightmare condition. US Government is indeed in the same situation, but the US Government is sacrificing the value of the US Dollar in order to keep the economy (and revenues) from a massive decline. All that is doing is increasing the velocity of the final impact with the ground. This kicking the can down the road in order to buy time which the politicians will most likely no longer be in office or have found a PR patsy to blame is about to end in a fiery crash.
@Dammy, There's a couple of reasons 2012 might not be a good year. The US is influenced by external forces. If European Countries see lots of bankrupcy it may trickle over. Also, if the Republicans try artifically limit the debt ceiling again we are going to have problems.
We are going to have problems, and the longer we keep spending with the kid's credit cards, the worse the situation is going to be when the creditors close the account out and demand their money back. We need to stop the spending
now with the hopes it's not already too late. If it is already too late, we might be able to survive it intact and recover within 30 years if we stop this insanity of spending the kid's credit cards. I talk to kids that are now in college, I feel so sorry for them, they seldom have a clue on how radical changes are going to be their lives and their future children's lives.
Why are we seeing gas prices increase? There are a few reason. One reason, sure you can blame Obama, is the US economy is showing signs of strength and further recovery. To do this we'll need more gas. So just as gas bottomed in Nov 2008 because the economy pettered out and gas demand fell, we are seeing the opposite reaction as things pick up - higher demand and higher prices.
Two reasons why we are seeing the price of gas go up slightly with massive increases coming in the next 12 months. Internal reasons are Obama's awful policies he has setup and enforcing. He is making damn sure we don't tap into our own oil production and have to bleed money out to foreign oil. That is over $300B the US consumer is sending outside of the US. Second reason is external factors, the Global Elites have backed Muslim Brotherhood to take over the middle east and to run it as they fit, which means incompetence will reign and oil production will suffer. Chaos in the Gulf States will insure this happens between revolutions in Saudi, Kuwait, Bahrain, and Iran, although Iran may shut down oil flowing out of the Straights of Hormuz if they go to a soft war with Israel or USA. This will create shortages and $150-$200 @ barrel spot market and that will tank the economies that are already struggling to service their debt as they go further to pay more people entering into the Welfare roles. At that point is when the US is going back into the domestic energy business, $5 a gallon at the pumps. Which will be far nicer then the $7 and shortages we are going to experience for a couple of years.
You better be buying as much gold/silver at these cheap rates as you can. Fiat money will be next to worthless for many a moon until the IMF issues their transitional currency, the Bancor. What replaces the Bancor will be fully electronic and no paper but backed by gold and silver. Once that is there, that is when it's time to trade in the gold and silver for the new currency. If your investment is written on a piece of paper, it's only worth what that paper is worth. That goes for paper gold as well as we are seeing a large number of those investors just got screwed by MF Global.
