Budget & Debt Ceiling Deadlines - Same Old, Same Old

The recent Budget and Debt Ceiling deal, enacted by Congress and signed by Socialist President Obama did absolutely nothing to deal with our $17 Trillion National Debt and the $100 Trillion or more sitting out there in unfunded liability for Social Security, Medicare, Medicaid, ObamaCare, Disability Benefits and local, state and federal government pensions.   It is becoming clearer by the day that the Socialists will never agree to the spending cuts and Entitlement Reform needed to restore fiscal sanity in Washington DC.  It will not happen unless and until Republicans control all branches of government and even then, there is some doubt that Republicans will have the guts to do what is required to achieve a balanced budget and pay off our National Debt. 

This Blogger believes that none of these things will be done until we experience the economic collapse of the United States because at that point, there will be no other choice.   Before that happens, we will have very high interest rates and inflation as the Federal Reserve will start printing even more money to make up for the lack of takers willing the buy our Treasury Bonds.  That is actually already happening and they called it Quantitative Easing.   There is simply no way to tax our way out of the mess politicians for life have created in Washington DC as Socialists propose.   Both Republicans and Socialists, over the years, have promised their PEEP's benefits, to win elections, that cannot be paid.   It is what it is.   

They will print money that will destroy the value of the dollar to pay the amounts promised; but it won't matter because the dollar itself that they pay out will be worthless.   The only people that will benefit from all of this will be those that own Guns for protection, Gold, Real Estate and perhaps other commodities that have value.   Local, State and Federal Governments can and will default on the bonds they issue, i.e. Detroit, or pay them off with worthless dollars.  

Now is the time to start planning for what is coming.   Pay off debt, or refinance mortgages to get historically low fixed interest rates.   If you own your home free and clear at least you will always have a place to live; though they will raise property taxes in an attempt to keep local government and schools funded.   Unfortunately, the global picture is not much better as Western Democracies are all in a similar position, having borrowed money to fund their Socialist societies.   We see the end of the story in countries like Greece, Ireland, Italy, Portugal, France and Spain where their young people have no futures.  In Cyprus, the government confiscated money in savings accounts, which was unprecedented. 

The balloon will burst.   The only question is when.   78 million Baby Boomers are turning 65 at a rate of 10,000 a day.  All of these people are applying for Social Security and Medicare, both of which are headed toward bankruptcy.  The Federal Reserve will have to print money to buy US Treasuries, adding to our National Debt, to pay these benefits.   This results in a vicious cycle.  The markets, like Chinese investors, are already saying they are going to stop buying US Treasuries because the risk of default is real.   We have already seen the US credit rating downgraded once and it will happen again. 

When that happens the Federal Reserve will have to print more money making the dollar even more worthless.  In the end, the markets will determine our destiny and it will not be pretty.   We will have civil strife on our streets that could lead to the dissolution of the United States.  Don't think it can't happen because it has happened in other countries.   Our children, grandchildren and great grandchildren will not live in the United States created by our Founding Fathers; that's for sure.  Nor will they experience the standard of living that existed in the last 50 years.