Is The U.S. Too Big To Fail?

[No DUplicitous DUpe]

Is The U.S. Too Big To Fail?
posted with permission from http://sane-ramblings.blogspot.com/2010/05/is-us-too-big-to-fail.html

With its bailouts, stimulus and what has now become its perpetual wars and endless massive weapons programs, the U.S. is racking up debts at an astounding rate. How fast? Please see http://usdebtclock.org

Where is the money coming from? It is being borrowed at an equally astounding rate ($166 billion the week of 5/24/10 alone, a near all-time record). Because even that is not nearly enough, money is also being printed out of thin air by the Fed.

How bad are the U.S.'s debts? It already costs nearly $400 billion a year just to pay the interest on the current debt and that number is rising fast. Even if not another penny is borrowed, imagine how high it will go as interest rates rise.

That's the spending side. How about income? For every dollar the U.S. government spends, it takes in just 61 cents.* This is a recipe for disaster! America will soon be confronted with the horrific choices the Europeans face but on a far grander scale.

There are two possible answers to this dilemma. One is to sharply raise taxes to pay for all of this spending. But most people strongly oppose this approach and despite the mounting bills, some politicians actually want tax cuts.

The other answer is to slash spending. But where will the cuts come from? How about from the Defense Dept. and its many contractors? But Congress views them as untouchable because they employ millions of Americans in high paying jobs, and virtually every Congressional District has some of those jobs. Unfortunately, those high paying jobs are all at taxpayer's expense.

How about from social welfare programs such as Medicare, Medicaid, Social Security, the still largely undefined Obama health care reform program and Education? But those are the programs that most affect the young, the old, the poor and working class families, the latter of whom pay most of the taxes. Cutting those programs would be political suicide and politicians won't want to touch them.

How about slashing government employment, the biggest jobs program in the U.S.? But as we've seen in Greece and will see elsewhere in Europe, their unions will never allow it and they will strike, bringing much of the U.S. to a stand still.

So where will the cuts come from? If you have a better solution, please voice it. But otherwise the U.S. has driven itself off a cliff and there will be a crash at the bottom and the fiery explosion that will follow.

Or, instead you can buy into the U.S. government's fantasy of a current "sustained economic recovery gaining traction" and do nothing. But that's like being on board the Titanic after it hit the iceberg, denying the flood of water rapidly overtaking the ship and for a time, continue steaming merrily toward the port of New York.

Assuming you're not among those in denial, there is still very good news for the U.S. has a very bright future. As in the Great Depression, Americans will unite to help one another get through the harsh times.

When the rebirth of America begins, it will be led by the Silicon Valley, that created top companies like Apple, Cisco, Facebook, Google, Hewlett-Packard, Intel, Oracle and many other successful firms that provide millions of productive jobs that help to make the world a better place. With global warming, pollution, hunger and sickness crying out for innovative solutions, their creativity couldn't come at a better time.

[ixion]

1. There is no such entity that is "too big to fail" that phrase is a sound-byte

created by a media that acts as enablers. As usual with their tripe, there is no logic to this at all. It is simply buffoonery.

[NoNothing]

2. There is a vicious dynamic at work

I used to believe that eventually the fiscal problem would become severe enough that people would start compromising, seeing that unless they are willing to yield something themselves, whether it's less subsidy or higher taxes or both, progress would be impossible.

But I've come to realize that in fact it's the opposite: the less likely a sustainable solution realistically seems, the less likely anyone is going to be to give up anything themselves for what they perceive to be a lost cause, electing instead to grab as much as they can before the end. Thus making a solution less likely and so on.

[DJ13]

3. WWII proved that there IS a way out of massive deficits

You have to increase wages, and build a manufacturing base to employ the unemployed.

Growth reduces deficits, but if you'll note our MSM never postulates that as a solution.

For them (and their corporate masters who love outsourcing) the only solutions mentioned involve reductions of social programs.

[NoNothing]

4. It might also have proved that the way out of massive deficits

Is to bomb the major industrial centers of the rest of the world into rubble. Unfortunately absent that convincing the rest of the world to buy our manufactured goods at higher prices than their own might be a tough sell.

[Coyote_Bandit]

5. Maybe

the US is already a failed nation and we just haven't realized it yet?

[No DUplicitous DUpe]

6. That is what the car sailing off a cliff implies...

but when we hit the bottom of the canyon, then the harsh realization will be seen and felt.

[arbusto_baboso]

7. Was the Roman Empire too big to fail?

Obviously not.

What the fuck makes us think we're any different and don't play by the same natural laws?

[No DUplicitous DUpe]

8. 32 States Now Officially Bankrupt: $37.8 Billion Borrowed From Treasury To Fund Unemployment

32 States Now Officially Bankrupt: $37.8 Billion Borrowed From Treasury To Fund Unemployment
cross posted from http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x79015

<snip>
Courtesy of Economic Policy Journal we now know that the majority of American states are currently insolvent, and that the US Treasury has been conducting a shadow bailout of at least 32 US states. Over 60% of Americans receiving state unemployment benefits are getting these directly from the US government, as 32 states have now borrowed $37.8 billion from Uncle Sam to fund unemployment insurance. The states in most dire condition, are, not unexpectedly, the unholy trifecta of California ($6.9 billion borrowed), Michigan ($3.9 billion), and New York ($3.2 billion). With this form of shadow bailout occurring, one can only wonder how many other shadow programs are currently in operation to fund states under the table with federal money.The full list of America's 32 insolvent states is below, sorted in order of bankruptedness.
</snip>

[Ter]

9. Define fail

What happens if we fail? States form their own countries?