GDP production (goods sold in economy)
The reality of this data shows that spending (entitlement programs) must be cut back
significantly and taxes must be increased signficantly in order to make good on our
debt obligations. The political reality is that neither of these options will happen, maybe
an increase in taxes, but they can only be increased by so much before the economy
and jobs market take a major hit. A currency debasement must occur in order to bring
the debt and deficits in line. How big of a debasement is anyone's guess, but I'll wager
on a 50% to possibly 75% decline within the next decade. That sounds like a major
decline, but that's only 7% inflation for the next decade for the dollar to decline by 50%.
The trillion dollar question here is… what happens when you factor in declinning oil
exports and the end to cheap energy? The assumption of constant real GDP growth may
have been the "inconvenient truth" that Al Gore was referring to!
What's really amazing is that this doesn't
include the $10 Trillion in bailouts for
Freddie/Fannie and backing up countless
Inflation is a monetary phenomena.
Ex. Feds creating more money
Hyperinflation occurs when there is a
loss of confidence in the currency.
By debasing the dollar, our national debt
decreases in real dollar terms and our
products become cheaper to Foreigners
which will increase our exports!
By cutting back on spending,benefits and
increasing taxes massively we can slowly
payback our debt and realize lower living
standards and higher unemployment
If you were the government and wanted to
remain in power, what do you do?
(*Hint* Start the printing press)