Some of you have fallen into the credit card trap and maxxed out at least one card, and just paying the interest on that card now is a major part of your budget. This happened because you spent more than you earned and borrowed to make up the difference. Each year, you kept on, until you were barely able to feed yourself after paying your credit card bill each month, and the interest was jacked up so high that hardly anything is left over after the card payment.
Or maybe you bought a house that you could just barely afford and then had to take a lower paying job? Now you have a 30 year debt that’s become unbearable.
The Budget Deficit is the difference between what our government fools make in revenues and what they spend, and they borrow the difference and do this every year without ever paying back any of the loans. What they pay back is interest on the loans until the bonds expire at the end of 30 years. Just like your house mortgage.
Bonds sold 30 years ago have to be paid off now. This is part of the governments operating cost. After 30 years, the dollar has dropped in value to about a dime, so the bonds are paid off with cheap money and not much of it in todays terms. Where the bondholders make out is in all that interest they get over 30 years.
The primary reason for inflation is the printing of money to pay debts.
Todays news is that The Budget shortfall, or Deficit, is nearly $1.7 trillion so far this year, more than $400 billion larger than was forecast two months ago, and no doubt is still growing. That’s just the debt for this year so far, it doesn’t count the over 10 $trillion$ from the 8 years of Bush. Last year the interest on the National Debt was $412 BILLION.Compare that to NASA at $15 Billion, Education at $61 Billion, and Department of Transportation at $56 Billion. — As of 28 February 2009, the total interest spent so far this fiscal year is $148 Billion.
The interest expense paid on the National Debt is the third largest expense in the federal budget. The US has been borrowing to keep going since 1966, and as the borrowing has continued, the amount of interest to be paid has grown. Bankruptcy happens when you borrow so much that all your income goes for interest payments.
When the Federal Reserve “buys” Treasury bonds, what they’re doing is printing the amount of money equivalent to the amount of bonds they wish to “buy”, which in this latest case is $1.2 trillion. Essentially it just means that they’re giving Obama and Pelosi a free bundle of cash that they don’t have to borrow from the Chinese.
I said awhile back that the Chinese might not want any more of our Treasury bonds and that the little dust-up in the China Sea was a way of saying that. I think the deal is that they want a say in the level of our government spending and money printing and we said “No thanks”. So since the Chinese are making us any more loans, we’re just printing it up instead.
The value of the dollar is dropping as I type and the price of gold and other “refuge” commodities is rising as investors trade in their dollars. What’s happening is this:
Trade wars have begun, between us and Europe and Mexico. Likewise other nations are having their own tariff battles. Many good will become too expensive or unobtainable.
Unemployment will continue to rise. Your dollars will buy less, and less, and less, yet your wages will not rise because jobs will be so scarce. You’ll just have to tighten your belts and do your best to get by.
The Mortgage Crisis is just getting on a roll. The deepening depression will force many more people out of their homes or the banks to grant a moratorium on payments. Propery values will continue to drop.
More servicemen are reenlisting now than since the last depression. It’s a job. They’ll need a war to justify their jobs, and they’ll have one. If we don’t go to it, it will come to us.
This entry was posted
on Saturday, March 21st, 2009 at 12:11 am and is filed under Commentary.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
Empty Pockets
Some of you have fallen into the credit card trap and maxxed out at least one card, and just paying the interest on that card now is a major part of your budget. This happened because you spent more than you earned and borrowed to make up the difference. Each year, you kept on, until you were barely able to feed yourself after paying your credit card bill each month, and the interest was jacked up so high that hardly anything is left over after the card payment.
Or maybe you bought a house that you could just barely afford and then had to take a lower paying job? Now you have a 30 year debt that’s become unbearable.
The Budget Deficit is the difference between what our government fools make in revenues and what they spend, and they borrow the difference and do this every year without ever paying back any of the loans. What they pay back is interest on the loans until the bonds expire at the end of 30 years. Just like your house mortgage.
Bonds sold 30 years ago have to be paid off now. This is part of the governments operating cost. After 30 years, the dollar has dropped in value to about a dime, so the bonds are paid off with cheap money and not much of it in todays terms. Where the bondholders make out is in all that interest they get over 30 years.
The primary reason for inflation is the printing of money to pay debts.
Todays news is that The Budget shortfall, or Deficit, is nearly $1.7 trillion so far this year, more than $400 billion larger than was forecast two months ago, and no doubt is still growing. That’s just the debt for this year so far, it doesn’t count the over 10 $trillion$ from the 8 years of Bush. Last year the interest on the National Debt was $412 BILLION. Compare that to NASA at $15 Billion, Education at $61 Billion, and Department of Transportation at $56 Billion. — As of 28 February 2009, the total interest spent so far this fiscal year is $148 Billion.
The interest expense paid on the National Debt is the third largest expense in the federal budget. The US has been borrowing to keep going since 1966, and as the borrowing has continued, the amount of interest to be paid has grown. Bankruptcy happens when you borrow so much that all your income goes for interest payments.
When the Federal Reserve “buys” Treasury bonds, what they’re doing is printing the amount of money equivalent to the amount of bonds they wish to “buy”, which in this latest case is $1.2 trillion. Essentially it just means that they’re giving Obama and Pelosi a free bundle of cash that they don’t have to borrow from the Chinese.
I said awhile back that the Chinese might not want any more of our Treasury bonds and that the little dust-up in the China Sea was a way of saying that. I think the deal is that they want a say in the level of our government spending and money printing and we said “No thanks”. So since the Chinese are making us any more loans, we’re just printing it up instead.
The value of the dollar is dropping as I type and the price of gold and other “refuge” commodities is rising as investors trade in their dollars. What’s happening is this:
Trade wars have begun, between us and Europe and Mexico. Likewise other nations are having their own tariff battles. Many good will become too expensive or unobtainable.
Unemployment will continue to rise. Your dollars will buy less, and less, and less, yet your wages will not rise because jobs will be so scarce. You’ll just have to tighten your belts and do your best to get by.
The Mortgage Crisis is just getting on a roll. The deepening depression will force many more people out of their homes or the banks to grant a moratorium on payments. Propery values will continue to drop.
More servicemen are reenlisting now than since the last depression. It’s a job. They’ll need a war to justify their jobs, and they’ll have one. If we don’t go to it, it will come to us.
Here’s the theme song, for the Obama presidency, and for YOU: Bing Crosby, “Brother, can you spare a dime”
This entry was posted on Saturday, March 21st, 2009 at 12:11 am and is filed under Commentary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.