How much worse will it get? The Government theoretically is already shut-down, and if congress and the president can’t strike a deal to extend the borrowing limit by Thursday, the U.S. is scheduled to run out of cash to pay its debts. Top finance officials all over the world have cautioned that if the U.S. defaults on its debt, the impact on the world economies would be devastating. In a few days, we hope to avert the pending crisis, but any resolution isn’t likely to address the real problem of out of control government spending. Consider the following facts:
- The U.S. Government has piled up a staggering $17 trillion in debt with another $60 trillion in unfunded spending promises.
- The Federal Reserve will have borrowed another $1.1 trillion in 2013 alone to buy overpriced bonds from wealthy Wall Street investors, with no guaranteed plans to stop buying bonds and mortgage securities.
- The government is spending $3.6 trillion without a budget, and this number is expected to skyrocket in coming years with healthcare costs and especially if the cost of borrowing increases.
- According to the Congressional Budget Office, $250 billion per month in spending occurs automatically, and can’t be controlled by Congress. That’s 80% of all spending.
- Federal control of the economy and financial markets grows stronger month, by month.
- Fraud is rampant in many of the major federal program.
A system of checks and balance must be put into place, and soon! The politicians must find a way to agree to terminate ineffective federal programs, and reduce both borrowing and spending. (There are over 200 federal programs at the present time.) A failure to do so is likely to lead to an inability for the country to dig out of the financial mess that has been made. Let’s hope that for once, Politicians on both sides of the aisle and the president stop kicking the can down the road, and finally address both the short-term and long-term impacts of reckless spending policies.