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CBO provides an historic view of federal debt: why this won't work

The Congressional Budget Office just released an important study, Federal Debt and the Risk of a Fiscal Crisis, July 27, 2010.  The good news is that we have the analysis. The bad news is akin to the cart before the horse. The country needs this analysis before of the decisions get made, so citizens may make informed, reasoned decisions. Congress and the Administration turn a willful blind eye to such nicities, by operating in such a way that prohibits the free, open, and timely dissemination of such information to the citizens.

Read the fine print and learn that Alternative Fiscal Scenario is where we're heading. Its ugly.



 The CBO points out the consequences of growing debt might include

  • crowding out of private investment
  • need for higher taxes
  • need for less spending
  • reduced ability to respond to domestic or international problems, and
  • an increased probability of fiscal crisis

What options does CBO present as available to cure the problem? Three out of four are problematic... at least for economic viability.

  • restructure debt
  • induce inflation
  • increase taxes
  • reduce spending

No, we're not making this up. Read the article, learn of government debt/gdp of Argentina (50%), Greece (110%), and Ireland (70%).

Now square the picture above with the current US Treasury rates.


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