Gold Investing News: US 2009 Budget Deficit Is Biggest Since WW II
The annual 2009 US Government Deficit is reported to be 1.42 Trillion Dollars.
What is $1.42 trillion? It’s more than the total national debt for the first 200 years of the Republic, more than the entire economy of India, nearly as much as Canada’s, and more than $4,700 for every man, woman and child in the United States.
It’s the federal budget deficit for 2009, more than three times the most red ink ever amassed in a single year.
The federal deficit is threatening to strangle the United States economy and the dollar. Federal spending was in 2009 soared to 41% of US Yucky Domestic Product. If spending continues at this rate, in only 10 years, in 2019, the federal budget will be equal to 75% of the GDP And that date may be allot sooner if inflation or interest rates increase significantly.
The rudderless U.S. fiscal policy is the largest long-term risk to the U.S. economy,” says Kenneth Rogoff, a Harvard professor and former chief economist for the International Monetary Fund. “As we accumulate more and more debt, we leave ourselves very vulnerable.”
The risk is high, with most of the National Debt being held by foreign investors. 8 trillion is owned by foreign investors, 10%, $800 billion held by the Chinese alone. If these countries and investors where to become concerned about the safety of their investments, and start to liquidate their holdings; or if they even reduce the amount of our det they continue to buy, our economy will go into a tailspin of higher interest rates, and higer prices and inflation. Meanwhile the dollar will continue to slide as long as this undisciplined spending continues.
Source: http://apnews.myway.com/article/20091017/D9BCHP5O0.html
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