Standing before Congress and 43 million TV viewers last week for his state of the union address, President Barack Obama reached half a century into the past to convey the challenges facing his country in the future. “This,” he said, “is our generation’s Sputnik moment.” But if the space race, kicked off by Sputnik’s launch in 1957, was the signature challenge of a generation, it’s the rebuilding of American economic might that is the challenge now. And the enemy isn’t the Soviets, it’s the country’s towering mountain of debt: US$14 trillion and counting.
Whether Obama’s speech writers realized it or not, something else quite remarkable happened in 1957 that, while long forgotten, is far more relevant to the debt debate today. That year America balanced its books for the second year in a row. It would mark the last time the U.S. would post back-to-back budget surpluses. Instead, the U.S. has sunk deeper into debt with every passing year, save two rare exceptions: 1961 and 2001, when the dot-com bubble artificially boosted tax revenue that year.
For half a century America has lived far beyond its means. In the same way overextended households, which recklessly used the equity in their homes as ATM machines, finally collapsed under the weight of their mortgages and triggered the Great Recession, the U.S. has mortgaged its future to pay for wars, lavish health care and social security programs, government employee pensions and ever lower taxes. But many economists believe there’s a limit to how long Washington can go on borrowing before it faces a sovereign debt crisis of its own, plunging markets into chaos and triggering a crisis that will make the Great Recession look like a minor stumble. We’re already seeing several heavily indebted U.S. states like Illinois, California and New Jersey pushed to the brink—New Jersey Gov. Chris Christie has talked openly about the state going “bankrupt.”
Hey Everyone – I received this as an email and it is really good! I hope the link copied ok…
THIS IS A BIG REALITY CHECK AND TAKES ONLY 1.5 MINUTES TO VIEW!!!!!!
This is excellent!!! Click on the wimp.com link below
In the Presidents State of the Union he proposed a spending freeze for 5 years as a means to balance the Budget.. Well,,, Even if we could achieve the Revenue Growth from 1995 -2000, which was Record Growth generated by the Birth of a new Industry, in 5 years, Revenue, by 2016 would still fall short of current Spending by $400 Billion,,, It would take just over 11 years of 5% Revenue growth to catch up to current spending levels,,, But the Economy is only expected to grow 3% at best!!!! Freezing spending is not enough!!!!!
We are in Serious trouble here folks and your kids are going to pay the price!!!! The above scenario does not account for Rising Interest Rates which are currently so low they have no where to go but up!!! How much could just a one percentage point rise in interest payments cost the US? The Congressional Budget Office estimates that, over the next ten years, that yearly one percentage point rise would cost us an additional $1.033 trillion in interest payments, on top of the $5.079 trillion we’re already paying.
Subject: Fwd: A visual is worth a billion words-and reality check!
Hi Folks- Amazing! Now you know why we must all feel pain if we are to have any realistic chance of solving our problem. Once again, there is no easy way out.
Have a nice day,
An excellent visualization of our Federal budget and what a 100 million cut means. We need more like a thousand hundred millions to make a real difference.
This is very easy to understand our US budget—a must watch —one minute !
THIS IS A BIG REALITY CHECK AND TAKES ONLY 1.5 MINUTES TO VIEW!!!!!!
A student explains 100 Million Dollar Budget Cut
Trust me, you have to watch this one. I promise you’ll end up smarter in just a minute and thirty-eight seconds.
Recently Mr. Obama announced that over the next 90-days he is going to work to cut 100-Million dollars of spending out of the Federal Budget.
A college student explains. { VERY well done! } Even I can start to comprehend.
http://wimp.com/budgetcuts/
Have you seen the debt clocks for both the US and Canada. Canada is in hawk for 1000$ a second and the US is at 50,000$ a second. Two years ago, Canada was paying off its debt until this stimulous garbage hit the scene. Don’t give us more advice. Now the government gurus are saying its going to take 5 years to turn it around. This is from Harper, a supposed conservative. No more state capitalism please!