Saturday, July 30, 2011

A Deal Is Coming

The White House and Congressional leaders will soon announce a deal to raise the US government debt ceiling. Surprise! Surprise! This will be a victory for no one, except politicians. The debt will spiral on and should reach $ 20 trillion within seven or eight years. By 2025 we should soar over $ 30 Trillion. By that time, there will be no fix and we will face the Greece scenario without a European Central Bank handy to delay the inevitable.

So, the politicians will cheer that the system has worked. But, actually, the system, once again, failed. It simply continues the US on the path to ultimate bankruptcy. Without seriously reforming social security and medicare, we will come to a time when there is no way to avoid bankruptcy except dishonoring the social security and medicare promises to folks who are, by then, already dependent upon them. This is the endgame that Obama and the politicians are taking us to.

The rest of the Obama agenda will continue to stifle US economic growth and produce a generation of economic stagnation for the US. Europe will join us. Meanwhile the economic center of gravity of the world will shift to countries who don't have entitlement programs of any consequence -- China, Asia, Russia, etc. These countries, not the Western economies, will be the future economic powerhouses of the world. Perhaps, this was the Obama plan after all.

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