That's better, gold, anyone? Hakan Falk wrote:
>Kirk, > >Kotlikoff is not the first and will not be the last to point out the >alarming discrepancies and the Americans are still hiding their >heads in the sand. When we last discussed this, many suggested that >Iraq and confiscating the second largest oil reserves, would be >something of a help. Many of us suggested that it would not work that >way, on the contrary, US is doing something it cannot afford. This >becomes clearer for every day that passes. Some US corporations get a >lot, but the average Americans are paying. Now it rather makes US >morally bankrupt as well as financially. > >Hakan > >At 01:04 15/07/2006, you wrote: > > >><http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/07/14/cnusa14.xml>http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/07/14/cnusa14.xml >> >>US 'could be going bankrupt' >>By Edmund Conway, Economics Editor >>(Filed: 14/07/2006) >> >> >>The United States is heading for bankruptcy, according to an >>extraordinary paper published by one of the key members of the >>country's central bank. >>A ballooning budget deficit and a pensions and welfare timebomb >>could send! the economic superpower into insolvency, according to >>research by Professor Laurence Kotlikoff for the Federal Reserve >>Bank of St Louis, a leading constituent of the US Federal Reserve. >>Prof Kotlikoff said that, by some measures, the US is already >>bankrupt. "To paraphrase the Oxford English Dictionary, is the >>United States at the end of its resources, exhausted, stripped bare, >>destitute, bereft, wanting in property, or wrecked in consequence of >>failure to pay its creditors," he asked. >>According to his central analysis, "the US government is, indeed, >>bankrupt, insofar as it will be unable to pay its creditors, who, in >>this context, are current and future generations to whom it has >>explicitly or implicitly promised future net payments of various kinds''. >>The budget deficit in the US is not massive. The Bush administration >>this week cut its forecasts for the fiscal shortfall this year by >>almost a third, saying it will come in at 2.3pc of gross domestic >>product. This is smaller than most European countries - including >>the UK - which have deficits north of 3pc of GDP. >>Prof Kotlikoff, who teaches at Boston University, says: "The proper >>way to consider a country's solvency is to examine the lifetime >>fiscal burdens facing current and future generations. If these >>burdens exceed the resources of those generations, get close to >>doing so, or simply get so high as to preclude their full >>collection, the country's policy will be unsustainable and can >>constitute or lead to national bankruptcy. >>"Does the United States fit this bill? No one knows for sure, but >>there are strong reasons to believe the United States may be going broke." >>Experts have calculated that the country's long-term "fiscal gap" >>between all future government spending and all future receipts will >>widen immensely as the Baby Boomer generation retires, and as the >>amount the state will have to spend on healthcare and pensions >>soars. The total fiscal gap could be an almost incomprehensible >>$65.9 trillion, according to a study by Professors Gokhale and Smetters. >>The figure is massive because President George W Bush has made major >>tax cuts in recent years, and because the bill for Medicare, which >>provides health insurance for the elderly, and Medicaid, which does >>likewise for the poor, will increase greatly due to demographics. >>Prof Kotlikoff said: "This figure is more than five times US GDP and >>almost twice the size of national wealth. One way to wrap one's head >>around $65.9trillion is to ask what fiscal adjustments are needed to >>eliminate this red hole. The answers are terrifying. One solution is >>an immediate and permanent doubling of personal and corporate income >>taxes. Another is an immediate and permanent two-thirds cut in >>Social Security and Medicare benefits. A third alternative, were it >>feasible, would be to immediately and permanently cut all federal >>discretionary spending by 143pc." >>The scenario has serious implications for the dollar. If investors >>lose confidence in the US's future, and suspect the country may at >>some point allow inflation to erode away its debts, they may reduce >>their holdings of US Treasury bonds. >>Prof Kotlikoff said: "The United States has experienced high rates >>of inflation in the past and appears to be running the same type of >>fiscal policies that engendered hyperinflations in 20 countries over >>the past century." >>Paul Ashworth, of Capital Economics, was more sanguine about the >>coming retirement of the Baby Boomer generation. "For a start, the >>expected deterioration in the Federal budget owes more to rising per >>capita spending on health care than to changing demographics," he said. >>"This can be contained if the political will is there. Similarly, >>the expected increase in social security spending can be controlled >>by reducing the growth rate of benefits. Expecting a fix now is >>probably asking too much of short-sighted politicians who have no >>incentives to do so. But a fix, or at least a succession of patches, >>will come when the problem becomes more pressing." >> >> >>Open multiple messages at once with the >><http://us.rd.yahoo.com/evt=40787/*http://advision.webevents.yahoo.com/handraisers>all >> >>new Yahoo! Mail Beta. >>_______________________________________________ >>Biofuel mailing list >>Biofuel@sustainablelists.org >>http://sustainablelists.org/mailman/listinfo/biofuel_sustainablelists.org >> >>Biofuel at Journey to Forever: >>http://journeytoforever.org/biofuel.html >> >>Search the combined Biofuel and Biofuels-biz list archives (50,000 messages): >>http://www.mail-archive.com/biofuel@sustainablelists.org/ >> >> > > > >_______________________________________________ >Biofuel mailing list >Biofuel@sustainablelists.org >http://sustainablelists.org/mailman/listinfo/biofuel_sustainablelists.org > >Biofuel at Journey to Forever: >http://journeytoforever.org/biofuel.html > >Search the combined Biofuel and Biofuels-biz list archives (50,000 messages): >http://www.mail-archive.com/biofuel@sustainablelists.org/ > > > _______________________________________________ Biofuel mailing list Biofuel@sustainablelists.org http://sustainablelists.org/mailman/listinfo/biofuel_sustainablelists.org Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Search the combined Biofuel and Biofuels-biz list archives (50,000 messages): http://www.mail-archive.com/biofuel@sustainablelists.org/
