"The most significant threat to our national security is our debt," Admiral Michael Mullen, Chairman, Joint Chiefs of Staff, August 27, 2010

Friday, November 27, 2009

Economic Fission or Fusion

Deficits = Debt = Destruction. This simple formula is to economics as E = mc² (see link below) is to physics.

We all know that the US of A just piled up its single largest one year deficit in spending more than it taxed – a cool $1.4 trillion. Brings the total debt of the US of A to $12 trillion. See how fast we leave the concept of deficits and focus on debt. There is no other way. Deficits don’t destroy. Debt does. Deficits are the bacteria that infects the lungs. Debt is the fluid that fills the lungs. Death (destruction) is the result when you don’t empty the lungs or repay the debt.

So, can the US of A keep piling up the debt (fluid in the lungs) and remain healthy? TheFundamentals can’t even write those words without a sneer of disdain forming. Of course we can’t. This fantasy only occurs in the world Of GWBush and BHObama. Only fools would engage in the experiment to see where such folly would take us. So whither goest this experiment?

What is the true total debt of the US of A? Perhaps it’s time to ask the two court jesters – Bernanke and Geithner to compile the numbers. The emperor is fiddling with his teleprompter and the jesters are engaging in sycophantic and nauseating motions with their claims of good news: The recession is over. Good times are nigh. Watch them dance in their colorful tights and dangly hats. You and I both know they do not believe what they say. Real leaders would say, “Frugality and sacrifice.” These fools say it’s getting better. Watch their noses elongate. Look closely. Watch their eyes move. See the beads of sweat.

Insist that the jesters provide the following numbers:

1. Total US of A debts owed to all others including government agencies

2. Total US of A unfunded commitments to pay (include everything)

3. Total of the 50 states debts owed to all others including government agencies

4. Total of the 50 states unfunded commitments to pay (include everything)

5. Total of US private debt and contingent liabilities

When you get the five numbers totaled up and eliminate the double counting you will have an idea of whither goest the experiment. Explode or implode?  Ask the jesters how we will repay the total debt and meet the commitments to pay? Ask them to provide a repayment program for the debt and a plan to meet the payments for the unfunded commitments. Obama says he needs to carefully examine the options for Afghanistan. So give him 90 days to make a debt plan. Debt is a much larger threat to the homeland.

TheFundmentals makes this modest prediction. The jesters will use the 90 days to break out the top shelf whisky. The emperor will be naked. They will develop new antics and new words to flash across the teleprompter screen. None will speak the following truth: “We are busted. Broke. Caput. Fini. Good luck. Sayonara. zàijiàn. Hasta la vista.”

Impress your friends; read about the power of the atom at: http://www.worsleyschool.net/science/files/emc2/emc2.html

No comments: