Tuesday, April 5, 2011

US's looming Federal Debt crisis as described by Dave Cote of Honeywell.

US's looming Federal Debt crisis has to be addressed, and soon. Maybe not before the end of this week when the Federal government might shut down without a 2011 budget allocation. But soon.

Check out this video for the Committee for Economic Development: http://www.youtube.com/watch?v=-1DKIg2CcLk  (5min)

Or we can delay and let the debt market and the IMF help use with austerity decision.

My favorite, always is the national debt clock: http://www.usdebtclock.org/

Any comments on its accuracy are welcome. Seem pretty accurate though. When the Federal government has already spent all the money it gathered for Social Security and Medicare and the Baby Boomers all start to retire and start to require that money... It's gonna get ugly. Very ugly:-(

The question is how soon and how quickly we can start to dig ourselves out the hole we're in. Cote suggests both tax increases and spending cuts. For sure we have to get the 10% growth rate per year in SS & Medical expenses under central. But ever since "W" Bush we have cut taxes and increased spending. That was before we got into a recession and decided to stimulus-spend our way out of it... Only at the Federal government can that make any sense.

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